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Why is real GDP per capita more useful?

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Real GDP per capita is generally considered to be more useful than nominal GDP per capita because it adjusts for inflation and differences in population size.

Nominal GDP per capita is simply a measure of the total economic output in a country divided by the total population, without taking into account changes in the price level or cost of living. Therefore, nominal GDP per capita can be misleading as it does not reflect changes in the purchasing power of the population over time.

On the other hand, real GDP per capita adjusts for inflation, which means it reflects the actual changes in the production of goods and services, taking into account the actual cost of living. This makes it a more accurate measure of a country's economic growth and prosperity.

Additionally, real GDP per capita accounts for differences in population size, allowing for a more accurate comparison of the economic performance of different countries over time.

Overall, real GDP per capita is a more reliable measure of a country's economic performance and standard of living than nominal GDP per capita.
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