Question

Real GDP per capita Multiple Choice 1. can grow either more slowly or more rapidly than real GDP. 2. cannot grow more slowly than real GDP. 3. cannot grow more rapidly than real GDP.4. necessarily grows more rapidly than real GDP.

Answer 1

Answer:

1) can grow either more slowly or more rapidly than real GDP.

Explanation:

Real GDP per capita is the result of dividing real GDP by the total population of a country. Real GDP per capita changes are determined by both the changes in the real GDP and the changes in the population.

If real GDP grows at a slower rate than the population, then real GDP per capita will decrease. But if real GDP grows at a faster rate than the population, then real GDP per capita will increase.

For example, real GDP grows at 3% while population grows at 2%, real GDP per capita will grow by 1%. But some countries have positive economic growth and negative population growth, so the real GDP could grow by only 2%, but since the population growth is -1%, the real GDP per capita will grow at 3%.