If GDP grows more rapidly than population for a particular country over a period of time, then we can determine that
A. Real GDP has decreased.
B. All citizens of this country are better off.
C. GDP per capita has increased.
D. GDP must rise at a slower rate in the future.
The correct answer and explanation is :
Correct Answer: C. GDP per capita has increased.
Explanation (300 words):
Gross Domestic Product (GDP) measures the total market value of all goods and services produced in a country within a specific time period. When economists compare the economic well-being of individuals in a country over time, they often look at GDP per capita, which is calculated by dividing the total GDP by the country’s population.
If GDP grows more rapidly than the population, this means the total economic output is increasing faster than the number of people sharing that output. As a result, GDP per capita increases, meaning that, on average, each individual in the country has access to a greater share of goods and services than before. This is why option C is the correct answer.
Why the Other Options Are Incorrect:
- A. Real GDP has decreased: This is incorrect. The question states that GDP is growing more rapidly than the population, so GDP is increasing—not decreasing.
- B. All citizens of this country are better off: While an increase in GDP per capita can suggest improving living standards, it does not guarantee that all citizens are better off. Income inequality, inflation, or uneven distribution of wealth can mean that only some people benefit while others do not.
- D. GDP must rise at a slower rate in the future: This is speculative and not necessarily true. Economic growth does not follow a fixed pattern. While some economists argue that rapid growth may slow over time due to factors like resource constraints or market saturation, this is not a guaranteed outcome based solely on the relationship between GDP and population.
In conclusion, GDP per capita increases when GDP grows faster than population, making Option C the only logically and economically correct choice.