Holding all else constant, a country's standard of living will decline if its

Question

Quizplus · Accepted Answer

If the rate of population growth exceeds the rate of growth of real GDP, there will be less output per person and the standard of living will decline. This is because there will be fewer goods and services available per capita. GDP measures the total output of a country, while real GDP adjusts for inflation, allowing for a more accurate measurement of economic growth. Nominal GDP, on the other hand, does not adjust for inflation and may be inflated by price increases. Therefore, choices A and B do not necessarily indicate a decline in the standard of living. Similarly, if the rate of population growth is less than the rate of growth of real GDP, the standard of living may increase as there are more goods and services available per person.

Holding All Else Constant, a Country's Standard of Living Will