If a country's real GDP is rising by 2% per year while its population is rising at 7% 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 all final goods and services produced within a country's borders, adjusted for inflation. In this scenario, real GDP is only rising by 2%, which is lower than the population growth rate of 7%. This means that the country's overall production of goods and services is not keeping up with the pace of population growth. As a result, the country's per capita output, or standard of living, is falling.

If a Country's Real GDP Is Rising by 2% Per