Suppose that the following occurred in two countries during the past decade. Country A, real Gross Domestic Product (GDP) rose 40 percent and population rose 46 percent; Country B, real Gross Domestic Product (GDP) increased 80 percent and population increased 75 percent. Based on this information, which is TRUE?
A) Both countries have experienced growth in per capita real Gross Domestic Product (GDP).
B) Neither country has experienced growth in per capita real Gross Domestic Product (GDP).
C) Chances for an improved standard of living are greater in Country A.
D) Only Country B has experienced growth in its per capita real Gross Domestic Product (GDP).

Question

Quizplus · Accepted Answer

Per capita real GDP growth occurs when the percentage increase in real GDP exceeds the percentage increase in population. For Country A, real GDP rose by 40% while the population rose by 46%, indicating a decrease in per capita real GDP. For Country B, real GDP increased by 80% while the population increased by 75%, indicating an increase in per capita real GDP. Therefore, only Country B has experienced growth in its per capita real GDP.

Suppose That the Following Occurred in Two Countries During the Past