If national real GDP grows at twice the rate of population growth,
A) real per capita GDP growth will double each year.
B) eventually there will be too much GDP.
C) real per capita GDP will double each year.
D) real per capita GDP will be reduced by half each year.

Question

Quizplus · Accepted Answer

If national real GDP grows at twice the rate of population growth, it means the economy is expanding faster than the population is increasing. This does not necessarily mean real per capita GDP will double each year; rather, it indicates that the average economic output per person (real per capita GDP) is increasing, as the total economic growth is outpacing population growth. The options suggesting doubling or halving of real per capita GDP each year, or the idea of having "too much GDP," do not accurately reflect the implications of the given growth rates.

If National Real GDP Grows at Twice the Rate of Population