If an economy's population grows at 3 percent and real GDP grows at 3 percent, then:
A) per capita real GDP is declining.
B) the economy's standard of living is increasing.
C) per capita real GDP is negative.
D) per capita real GDP is constant.
E) the economy is experiencing unemployment.

Question

Quizplus · Accepted Answer

Per capita real GDP is calculated by dividing real GDP by the population. In this case, both population and real GDP are growing at the same rate of 3%, so per capita real GDP remains constant. The standard of living could be increasing or decreasing depending on other factors such as income distribution and inflation. There is no information provided about unemployment in the question.

If an Economy's Population Grows at 3 Percent and Real