If Real GDP Is Increasing More Rapidly Than Population

question 101

Multiple Choice

If real GDP is increasing more rapidly than population,

• A) population must be declining.
• B) the country will have to export more than it imports.
• C) the general level of prices must be increasing.
• D) per capita real GDP will be increasing.

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Definitions:

Transfer Payments

Payments made by governments to individuals without any expectation of a good or service in return, such as welfare or unemployment benefits.

Marginal Propensity

This measures the likelihood of an individual or entity to spend an additional unit of currency. Specifically, it assesses how changes in income affect spending or saving habits.

Average Propensity

The ratio of total spending (consumption or saving) to total income, indicating how income is distributed across different economic activities.

Marginal Propensity

The measure of how much consumption changes with a change in disposable income, indicating the proportion of additional income that is spent on consumption.