If a country's real GDP is rising by 4% per year while its population is rising at 3% per year, which of the following is true?
A)The country's standard of living is falling.
B)The country's standard of living is rising.
C)Growth in nominal GDP outweighs growth in the population.
D)Growth in nominal GDP is less than the growth in the population.

Question

Quizplus · Accepted Answer

Real GDP measures the value of goods and services produced in an economy adjusted for inflation, while population growth reflects the number of people in a country. If real GDP is rising faster than population growth, then the country's output of goods and services per person is increasing, which indicates a higher standard of living for its citizens. Hence, the correct option is B.

If a Country's Real GDP Is Rising by 4% Per