Suppose a Country's Population Grows by 2 Percent a Year

question 73

Multiple Choice

Suppose a country's population grows by 2 percent a year and, at the same time, its real GDP grows by 5 percent a year.Real GDP per person is increasing by _______ a year.

• A)3 percent
• B)2 percent
• C)10 percent
• D)5 percent
• E)7 percent

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Definitions:

Arithmetic Average

The simple mean calculated by dividing the sum of a set of numbers by the quantity of numbers in the set.

Geometric Average

A method of calculating the average rate of return that accounts for compounding, often used for investment portfolios.

Long-term

In finance, refers to investments or loans that mature in more than one year; in general use, refers to a duration extending over a long period.

Canadian Small Stocks

Equity securities of small-cap companies based in Canada, often characterized by higher volatility and growth potential than larger firms.