If the real GDP of a country increases by 3 percent and the population of the country increases by 2 percent over a period of time, then the real GDP per capita of the country must have:
A) increased by 2 percent.
B) increased by 1 percent.
C) decreased by 2 percent.
D) decreased by 1 percent.

Question

Quizplus · Accepted Answer

The real GDP per capita increases because the GDP growth rate (3%) is higher than the population growth rate (2%). The difference (1%) represents the increase in GDP per capita.

If the Real GDP of a Country Increases by 3