If an economy's population grows at 3 percent and real GDP grows at 2 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 growing.

Question

Quizplus · Accepted Answer

Even though real GDP is growing, if the population is growing at a faster rate, per capita real GDP (real GDP per person) is declining. This means that, on average, each person is producing less than before and therefore their standard of living is decreasing.

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