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:

Cash Basis

An accounting method recognizing revenues and expenses when cash is actually received or paid out, rather than when earned or incurred.

Selling and Administrative Expense

Expenses related to the selling of products and the management of the business, not directly tied to production.

Statement of Cash Flows

A financial report that summarizes the amount of cash and cash equivalents entering and leaving a company.

Income Tax Expense

The amount of income tax a company is obligated to pay to the government, based on its taxable income.