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If real GDP grows by (8%) but real GDP per capita grows by only (2%) approximately how much did population grow?

Answer and explanation

Correct answer: (6%)

The governing identity is real GDP per capita = real GDP divided by population. In growth-rate form, approximately, per-capita GDP growth equals total real GDP growth minus population growth. Therefore population growth is approximately 8% − 2% = 6%. Option B is correct. The exact multiplicative calculation gives a very similar figure, so the approximation is appropriate; 2%, 8%, and 10% confuse one of the given rates or add them incorrectly.

Related tags

Growth RatesPopulation GrowthPer Capita GdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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