A constant rate of U.S. economic growth over a given period of years would involve
A) adding the same amount of nominal dollars to real GDP per capita each year.
B) adding the same amount of real dollars to real GDP per capita each year.
C) compounding the percentage increase in real GDP per capita over the years.
D) None of the above are correct.

Question

Quizplus · Accepted Answer

A constant rate of economic growth involves compounding the percentage increase in real GDP per capita over the years. This means that the rate of growth is stable and consistent over time, resulting in a steady increase in real GDP per capita. Option A is incorrect because it states adding the same nominal amount, which does not account for inflation, whereas economic growth is commonly measured in real, inflation-adjusted terms. Option B is also incorrect because real GDP per capita is already adjusted for inflation, so adding the same real amount would result in a constant level of GDP per capita, not growth.

A Constant Rate of U