When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
if real GDP remains the same, an increase in the population actually means a lower average standards of living.
an increase in population will tend to reduce nominal GDP.
changes in population tend to have no effect on standards of living.
if real GDP remains the same, an increase in the population actually means a raised average standards of living.
an increase in the population will tend to decrease average prices.
Answer
Option 1
if real GDP remains the same, an increase in the population actually means a lower average standard of living.
Economic growth =nominal GDP growth - prices change - population growth
the price change adjusts to real GDP and the population changes adjust to individual share of the GDP.
When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect...
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