If a country's GDP rises but its population rises faster, what may happen to per capita GDP?
Answer and explanation
Correct answer: It may fall
Per capita GDP is calculated by dividing total GDP by population. Total GDP can increase while the denominator, population, increases even more rapidly. In that situation, the quotient may decline, meaning that average output or income per person falls. The exact result depends on the growth rates, but among the given choices, option B is the correct possibility.
Frequently asked questions
What is the correct answer to this question?
It may fall
Why is this the correct answer?
Per capita GDP is calculated by dividing total GDP by population. Total GDP can increase while the denominator, population, increases even more rapidly. In that situation, the quotient may decline, meaning that average output or income per person falls. The exact result depends on the growth rates, but among the given choices, option B is the correct possibility.
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.
