Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 11, Problem 7MCQ
To determine
The question requires us to determine the true option which causes the real GDP to increase.
Expert Solution & Answer
Explanation of Solution
The real GDP shows the average GDP per person in a country. GDP represents the welfare and standard of living of citizens in a country. It is the ratio of total output (real GDP) to the population of a country.
GDP per capita will increase when real GDP rises or the population falls. When all other things remain equal, a decrease in the population would lead to a rise in the real GDP per capita.
So, option “a” is correct.
The other options are incorrect because:
- A rise in population causes the real GDP per capita to fall when all other things remain equal.
- A price increase reduces the value of real GDP and, thus, the real GDP per capita.
- A fall in
aggregate output causes the real GDP to fall and leads to a lower real GDP per capita.
Chapter 11 Solutions
Krugman's Economics For The Ap® Course
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