Chapter 16, Problem 1E

To determine

Determine the growth of per capita GDP a better measure of economic growth than the growth of real GDP

Explanation of Solution

Economic growth is estimated by the increase in real Gross Domestic Product, Increase in real Gross Domestic Product in turn increase the consumption power of that economy.

As both are important parameters to estimate the growth of an economy but when it comes to determining the standard living of the individuals we need to consider population. As Gross Domestic Per Capita is an important indicator of economic performance. If the Gross Domestic Product exceeds the population growth rate than there is a rise in living standards.

Economics Concept Introduction

Concept Introduction:

Growth Domestic Product per capita measures the total output of a country that accounts for its people. It is calculated by dividing the Gross Domestic Product with number of people

Real Gross Domestic Product measures the total output of an economy that value of all goods and services in a year