As a Country's Economy Grows and Real GDP Per Capita

question 240

Multiple Choice

As a country's economy grows and real GDP per capita rises, citizens often do not feel proportionately better off. Which of the following provides a logical explanation for this?

• A) GDP may be rising due to rising prices rather than rising output.
• B) If the consumption portion of GDP is rising more rapidly than other categories of GDP, the average person may have less to consume.
• C) As incomes rise, households may use the extra income to buy services and goods that they used to produce for themselves; thus, even though GDP is higher, how much they actually consume is not higher.
• D) If the rise in output is due to an increase in the population, then the amount of goods available per person may not be rising.

---

Definitions:

Failing Course

A situation in which a student does not achieve the required minimum grade to pass a specific course, affecting academic progress.

Tacit Knowledge

The knowledge that is difficult to transfer to another person by writing it down or verbalizing it; often gained through personal experience.

Intuition

The ability to understand or know something immediately, without the need for conscious reasoning.

Problem Identification

The initial step in the problem-solving process where the issue is clearly defined and understood before seeking solutions.