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.

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Definitions:

Right Hemisphere

The half of the brain that controls the left side of the body, often associated with creativity, spatial ability, and visual imagery.

Left Hemisphere

The left side of the human brain, typically responsible for controlling the right side of the body and involved in logical reasoning, detailed analysis, and language processing.

James-Lange Theory

A theory of emotion suggesting that physiological arousal precedes the experience of emotion, meaning our feelings result from our body's reactions.

Cannon-Bard Theory

A psychological theory proposing that emotional feelings and physiological responses to stimuli occur simultaneously and independently.