If a country’s nominal GDP is constant, then which of
the following statements about it would be correct?
AIt is impossible for the real per capita GDP to rise in such circumstances.Correct AnswerIncorrect Answer
BThe real per capita GDP can rise if and only if the country’s population is shrinking and prices are falling.Correct AnswerIncorrect Answer
CFor the real per capita GDP to rise, it is sufficient that the price level should decline.Correct AnswerIncorrect Answer
DIt is possible for the real per capita GDP to rise even if the country’s population is increasingCorrect AnswerIncorrect Answer
Solution
RealpercapitaGDP = RealGDP/Population where, RealGDP = NominalGDP/PrceIndex So, if the prices are falling, then real per capita GDP can rise inspite of population growth.
