60.7k views
4 votes
Why is it important to express GDP and GNP in a per capita basis?

A) Population is always decreasing worldwide.
B) Population stays the same.
C) It is not the most accurate measurement of the economy.
D) None of these is correct.

not really sure what subject to list this as, sorry.

User EkcenierK
by
8.0k points

1 Answer

5 votes

Final answer:

Expressing GDP and GNP on a per capita basis is crucial for understanding the average economic well-being and making relevant comparisons between countries with varying population sizes.

Step-by-step explanation:

The importance of expressing GDP (Gross Domestic Product) and GNP (Gross National Product) on a per capita basis lies in its ability to provide a more accurate representation of an average individual's economic well-being within a country. When GDP or GNP values are divided by the population size (per capita), it allows for a more meaningful comparison across countries with different population sizes.

This method accounts for the differences in living standards, taking into consideration whether the population is growing faster or slower than GDP or GNP. Additionally, expressing these values in per capita terms helps to highlight whether, on average, people are becoming richer or poorer over time, regardless of the overall economy's size.

User Artur Siepietowski
by
9.2k points