Question

Economic Growth

	2017		2018
Product	Quantity	Price	Quantity	Price
Backpacks	100	$10	120	$12
Books	50	$15	40	$20

Using 2017 as a base year, calculate;

1) The GDP deflator

2) Nominal Economic growth

3) Real economic growth

4) Give reasons why Real GDP per capita may overstate the well-being of a countries inhabitants?

Answer 1

4.

Real GDP per capita is also called standard of living

Real GDP per capita is the ratio of total GDP of the country by the total population of that country

It is used across the world for measuring overall people condition of living

But it is not a complete measure and it is overstated

So many other factors can also be included for overall all data like happiness index, Gini coefficient index for income inequality etc