Question

Which of the following would represent the fastest annual growth of GDP per capita?

An increase in real GDP per capita of 3%.

An increase in real GDP of 6% and population growth of 4%.

An increase in real GDP of 5% and population growth of 1%.

An increase in real GDP of 2% and population decline of 1%.

Answer 1

An increase in real GDP of 5% and population growth of 1%.

The annual growth GDP per capita is given by the growth rate of real GDP minus the population growth rate. Although this option provides the largest increase in real GDP, it also provides the largest population growth rate, lowering the growth rate of real GDP per capita.