Real GDP was $4719 billion in year 1 and $4848 billion in year 2. In contrast re
ID: 1233893 • Letter: R
Question
Real GDP was $4719 billion in year 1 and $4848 billion in year 2. In contrast real GDP per ca pita in year 1 was $19261, but in year 2 it was only $19162. Why did one measure increase while the other measure decreased?a. Real GDP indicates the level of industrial production and provides a measure of the economic strength of the nation; it is only valid measure of economic growth
b. Inflation occurred during this period; therefore the two measures are not comparable
c. Population increased during this time period so real GDP per ca pita data reflect this change
d. Real GDP per ca pita measures changes in labor productivity that are not captured by a simple measure like real GDP
Explanation / Answer
a. Real GDP indicates the level of industrial production and provides a measure of the economic strength of the nation; it is only valid measure of economic growth GDP account for the growth of the company
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