If total output is constant but the population is rising, what may macroeconomic analysis focus on?
Answer and explanation
Correct answer: The effect on per capita income and standard of living
Per capita income is calculated by dividing total income or output by population. If total output remains unchanged while population increases, output and income per person tend to fall, unless distribution or other income sources change. Therefore macroeconomic analysis examines possible effects on average living standards, consumption capacity, and welfare.
Frequently asked questions
What is the correct answer to this question?
The effect on per capita income and standard of living
Why is this the correct answer?
Per capita income is calculated by dividing total income or output by population. If total output remains unchanged while population increases, output and income per person tend to fall, unless distribution or other income sources change. Therefore macroeconomic analysis examines possible effects on average living standards, consumption capacity, and welfare.
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.
