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If a country's total GDP rises by ten percent and population rises by twelve percent what is the appropriate conclusion about per capita output?

Answer and explanation

Correct answer: Per capita output is likely to fall

The governing concept is per capita output, calculated as total GDP divided by population. If GDP rises by 10% while population rises by 12%, the denominator grows faster than the numerator. Using the growth ratio, per capita output becomes approximately 1.10 divided by 1.12, or 0.982 of its former level, a small decline of about 1.8%. Therefore, option B is correct; the other choices contradict this comparison.

Related tags

Gdp GrowthPopulation GrowthPer Capita OutputGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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