Suppose a Country's Real GDP Increases

question 43

Multiple Choice

Suppose a country's real GDP increases. At the same time, its population also increases. What happens to its standard of living?

• A) Its standard of living remains the same.
• B) Its standard of living depends on the price level.
• C) Its standard of living could rise if population growth exceeds output growth.
• D) Its standard of living could rise if population growth is smaller than output growth.

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Definitions:

Debt Ratio

The debt ratio is a financial metric that compares a company's total liabilities to its total assets, indicating the proportion of a company’s assets that are financed by debt.

Solvency Risk

The risk that a company will not have enough funds to meet its long-term liabilities and financial commitments.

Long-term Asset Turnover Ratio

A financial metric that measures a company's efficiency in using its long-term assets to generate revenue.

Efficiency Gains

Improvement in the performance of a task, process, or system that leads to a reduction in resource usage, cost, or time required.