Suppose that real GDP increases by 5 percent while the population of a country increases by 7 percent. In this situation,
A) output per person necessarily increases.
B) output per person necessarily decreases.
C) output per person necessarily remains unchanged.
D) there is not enough information to determine what happens to output per person.

Question

Quizplus · Accepted Answer

Output per person is measured as real GDP per capita, which is calculated by dividing real GDP by the population. If real GDP increases by 5 percent and population increases by 7 percent, then real GDP per capita necessarily decreases. This is because the increase in population outpaces the increase in output, leading to a lower amount of output per person.

Suppose That Real GDP Increases by 5 Percent While the Population