Increases in real GNP per capita occur when ?
Correct answer: C. the rate of growth of real GNP is greater than the rate of growth of population
- A. government programs direct resources away from investment goods to consumer goods.
- B. tariffs and quotas prevent dollars from leaving the country
- C. the rate of growth of real GNP is greater than the rate of growth of population
- D. the level of consumption expenditures rises relative to the level of saving
Explanation
Real GNP per capita rises when total real GNP grows faster than the population, because output is increasing faster than the number of people sharing it. A rise in total GNP alone does not guarantee higher per-capita income.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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