If Real GDP Grows at a Faster Rate Than Population

question 27

Multiple Choice

If real GDP grows at a faster rate than population, then the standard of living, as measured by real GDP per person,

• A) worsens.
• B) cannot be measured.
• C) improves.
• D) remains the same.
• E) either improves, worsens or stays the same, depending on the size of the population and the actual level of real GDP.

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Definitions:

Profit Maximization

The strategy a business uses to ascertain the pricing and amount of production that maximizes profitability.

Workers

Individuals engaged in any form of economic activity to earn a wage or salary.

Wage

Compensation received by employees for their labor or services, often expressed in terms of hourly, daily, or annual earnings.

Marginal Product

The additional output that is produced as a result of using one more unit of a particular input, such as labor or capital, while keeping other inputs constant.