Question

Which of the following things does Real GDP per Capital account for?

Select one:

a. Real GDP per capita account for changes in environmental quality

b. Real GDP per capita account for changes in the size of the population

c. Real GDP per capita account for changes in longevity (how long people live)

d. Real GDP per capita account for changes in violent crimes throughout the country

e. Real GDP per Capita does not account for any of the things mentioned here

Answer 1

The Nominal GDP can be defined the market value of all goods and services which are produced in the domestic territory of the country in the current financial years.

GDP=C+I+G+X-M

Since real GDP is inflation adjusted because it is calculated based on the base year prices rather than current year prices.

Real GDP per capita= real GDP/ population

Hence it can be said that Real GDP per capita account for changes in the size of the population. This is because with the change in the size of population, the real GDP per capita will change.

Hence option b is the correct answer.