Why Is a Per Capita Measure Used as the Basis

question 22

Multiple Choice

Why is a per capita measure used as the basis for a nation's economic growth rate?

• A) Per capita measures focus on capital, which is the most important factor in growth.
• B) This is an adjustment for the cost of living, so the measure captures growth of output rather than price.
• C) Adjusting for the size of the population allows focus on the average person's situation.
• D) Per capita adjustments give insights into the gap between the most and least prosperous people in a country.

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Definitions:

Cost Behaviour

The way in which costs change in relation to variations in an organization's activity level or volume of output.

Sophisticated Methods

Advanced or complicated techniques and approaches used in various fields to solve problems or achieve objectives.

Curvilinear Cost

Describes a cost behavior that does not follow a straight-line relationship with the level of activity, often increasing at a non-constant rate as activity levels rise.

Relevant Range

The span of activity levels within which specific cost behavior assumptions (fixed and variable costs) are considered valid and applicable.