If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will

Question

Quizplus · Accepted Answer

While per capita real GDP is growing at a constant rate of 4 percent, an increase in population growth from 1 percent to 2 percent means that the economy is producing goods and services for more people. As a result, the total output of the economy is increasing at a faster rate than before, but the growth rate of per capita real GDP is slowing down. Therefore, the annual rate of growth of per capita real GDP will decrease.

If Real Per Capita Gross Domestic Product (GDP)grows at a Constant