A country will experience a decreasing real GDP per capita if the rate of population growth is slower than the rate of increase in real GDP.

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BlackTom AI · Accepted Answer

Question: A country will experience a decreasing real GDP per capita if the rate of population growth is slower than the rate of increase in real GDP.
Option 1: True. This statement is not correct because when real GDP grows faster than the population, real GDP per capita rises, not falls. A slower population growth relative to GDP growth means more output per person, so per capita GDP increases.
Option 2: False. This statement contradicts the relationship between GDP growth and population growth. If the population growth rate is slower than the growth rate of real GDP, the average output per person (real GDP per capita) actually increases, leading to an improvement in living standards on a per-person basis rather than a decrease.
In summary, the scenario described in the True option would not create a decrease in real GDP per capita; instead, the per-capita measure would increase when GDP growth outpaces population growth. The False option aligns with that dynamic, explaining why the statement as given is incorrect.

MCD2090 Macroeconomics - Trimester 3 - 2025

A country will experience a decreasing real GDP per capita if the rate of population growth is slower than the rate of increase in real GDP.

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