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When the economy is growing, total output is _____, and total income is _____.

a. Increasing, decreasing
b. Increasing, increasing
c. Decreasing, decreasing
d. None of the above

User Gogasca
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1 Answer

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Final answer:

During economic growth, both total output and total income are increasing. Total output refers to the goods and services produced (GDP), and total income refers to the earnings from that production. GDP must grow faster than the population for GDP per capita to also increase.

Step-by-step explanation:

When the economy is growing, total output and total income are both increasing. This is because as the economy expands, companies produce more goods and services, which leads to an increase in GDP, or Gross Domestic Product. A rise in GDP implies that both the value of goods and services produced and the income earned from that production are on the rise. It's important to note, however, that for GDP per capita to increase, GDP must grow at a rate faster than the population increases. If the population grows faster than GDP, then GDP per capita can decrease even while total GDP is increasing.

User Zanzoken
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