What happens to per capita GDP if total GDP remains constant and population falls?
Answer and explanation
Correct answer: It may rise
Per-capita GDP is calculated as total GDP divided by population: per-capita GDP = total GDP ÷ population. If total GDP remains constant while the population decreases, the denominator becomes smaller, so the average GDP per person increases. For example, a fixed output shared among fewer people gives a larger amount per person. Therefore, option C is correct; the other choices contradict this ratio calculation.
Frequently asked questions
What is the correct answer to this question?
It may rise
Why is this the correct answer?
Per-capita GDP is calculated as total GDP divided by population: per-capita GDP = total GDP ÷ population. If total GDP remains constant while the population decreases, the denominator becomes smaller, so the average GDP per person increases. For example, a fixed output shared among fewer people gives a larger amount per person. Therefore, option C is correct; the other choices contradict this ratio calculation.
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.
