Suppose a country's population grows by 2 percent a year and, at the same time, its real GDP grows by 5 percent a year.Real GDP per person is increasing by _______ a year.

Question

Quizplus · Accepted Answer

Real GDP per person (or per capita) growth can be calculated by subtracting the population growth rate from the real GDP growth rate. Therefore, if real GDP grows by 5 percent and the population grows by 2 percent, the growth in real GDP per person is 5% - 2% = 3% per year.

Suppose a Country's Population Grows by 2 Percent a Year