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Chapter 19: Q 8 (page 470)

Is it possible for GDP to rise while at the same time per capita GDP is falling? Is it possible for GDP to fall while per capita GDP is rising?

Short Answer

Expert verified

Yes it is possible for GDP to rise in this situation.

Step by step solution

01

Step 1. GDP

GDP is a type of monetary measure. this represents the calculated value of finished goods and services of a country or different countries for a specific period of time.

02

Step 2. Explanation

Answer to this question is yes.

It is possible for GDP to rise where at the same time per capita income is falling. The reason behind is very clear. The reason for following situation is:

03

Step 3. Reason

POPULATION

The answer to following situation depends on the population growing rate of economy.

If Population of country increases at faster rate than the GDP then the GDP rate will rise, but GDp per capita will decrease.

Same when population increases at slower rate than GDP, GDP rate of country will fall but GDP per capita will rise.

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Most popular questions from this chapter

The Czech Republic has a GDP of 1,800 billion koruny. The exchange rate is 25 koruny/U.S. dollar. The Czech population is 20 million. What is the GDP per capita of the Czech Republic expressed in U.S. dollars?

The Central African Republic has a GDP of 1,107,689 million CFA francs and a population of 4.862 million. The exchange rate is 284.681CFA francs per dollar. Calculate the GDP per capita of Central African Republic.

Why do you suppose that U.S. GDP is so much

higher today than 50or 100years ago?

Without looking at Table 19.7, return to Figure 19.10. If we define a recession as a significant decline in national output, can you identify any post- 1960 recessions in addition to the 2008-2009 recession? (This requires a judgment call.)

Why might per capita GDP be only an imperfect measure of a country’s standard of living?
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