If the real GDP of a country increases by 5 percent and the real GDP per capita increases by 3 percent over a period of time, then we can conclude that the population of the country during this time:
A) decreased by 2 percent.
B) decreased by 3 percent.
C) increased by 2 percent.
D) increased by 3 percent.

Question

Quizplus · Accepted Answer

The real GDP per capita increasing by a smaller percentage (3%) than the total real GDP (5%) implies that the denominator of the GDP per capita formula, which is population, must have increased. The difference in percentage growth rates (5% - 3% = 2%) suggests the population grew by 2%.

If the Real GDP of a Country Increases by 5