A country's GDP rose by 10% and its population rose by 4%. What is the approximate change in per capita output?
Answer and explanation
Correct answer: About 6% rise
Per capita output equals total output divided by population. For relatively small percentage changes, its approximate growth is found by subtracting population growth from GDP growth: 10% − 4% = 6%. Therefore, option C is the appropriate approximate answer. Adding the rates would incorrectly ignore the denominator, and a 4% fall has the wrong direction. The exact change is slightly below 6%, but the question asks for an approximation.
Frequently asked questions
What is the correct answer to this question?
About 6% rise
Why is this the correct answer?
Per capita output equals total output divided by population. For relatively small percentage changes, its approximate growth is found by subtracting population growth from GDP growth: 10% − 4% = 6%. Therefore, option C is the appropriate approximate answer. Adding the rates would incorrectly ignore the denominator, and a 4% fall has the wrong direction. The exact change is slightly below 6%, but the question asks for an approximation.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
