Suppose that in 2011 real GDP grew in Estonia by 3% and that the population increased by 5%.Therefore in 2011,Estonia experienced
A) economic growth, but not an increase in living standards.
B) economic growth and an increase in living standards.
C) no economic growth, but an increase in living standards.
D) no economic growth and no increase in living standards.

Question

Quizplus · Accepted Answer

Economic growth is measured by an increase in real GDP. In this case, Estonia experienced economic growth of 3%. However, an increase in population means that the same amount of goods and services have to be shared among more people, which could lead to a decrease in living standards. Therefore, while there was economic growth, there may not have been an increase in living standards for the average Estonian citizen.

Suppose That in 2011 Real GDP Grew in Estonia by 3