Question

Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 per-cent. What happened to real GDP per person?

a. It more than doubled.
b. It increased, but it less than doubled.
c. It was unchanged.
d. It decreased.

Answer 1

D. it decreased

Step-by-step explanation:

The GDP per person is an inverse proportional relation between GDP and Population, it means, when the GDP is higher than the number of the population usually the "incomes that everyone receive" is higher, but if the population increase, the incomes will be lower, however, there are another element that is important to take into account, The inflation that is basically the rise of the products prices. Inside an economy with inflation the adquisitve power decrease, because the currency lose value in the market, in this order of ideas you have to expense more money(income) to buy the amoung of products that you used to buy before. for those reasons the answer is d. the real GDP per person decreased.