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A country’s real GDP grows by 10%, while its population grows by 12%. What happens to real GDP per capita?

Answer and explanation

Correct answer: It will fall

Real GDP per capita is real GDP divided by population. The ratio changes by 1.10 ÷ 1.12 ≈ 0.982, so it falls by about 1.8%. Therefore, D is correct.

Related tags

Real Gdp Per CapitaGrowth RatesGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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