The strict definition of economic growth that serves to increase living standards is
A) an increase in real GDP per capita.
B) an increase in nominal GDP per capita.
C) an increase in capital accumulation per capita.
D) an increase in investment per capita.

Question

Quizplus · Accepted Answer

Economic growth is defined as an increase in a country's total output of goods and services over time. Real GDP is a measure of a country's actual economic output adjusted for inflation, while per capita means the output is divided by the population. Therefore, an increase in real GDP per capita indicates that the economy is producing more goods and services per person, which can lead to an improvement in living standards. Nominal GDP may increase due to inflation, so it does not necessarily reflect an increase in actual economic output. Capital accumulation and investment may contribute to economic growth, but per capita measures are needed to account for population growth.

The Strict Definition of Economic Growth That Serves to Increase