Increases in the total real output of many DVCs do not increase the nation's standard of living because
A) diminishing returns may be encountered in increasing total output.
B) population increases may dissipate the increase in real output.
C) disguised unemployment in agriculture will persist.
D) surplus farm labor may move from rural areas to industrial areas, causing unemployment.

Question

Quizplus · Accepted Answer

The increase in a nation's total real output does not necessarily improve the standard of living if the population grows at a faster rate, as any increase in output per capita (which more directly affects the standard of living) may be offset by the population increase. This means that even though more goods and services are being produced, the per capita share may not increase if the population is growing too quickly.

Increases in the Total Real Output of Many DVCs Do