Assume the population growth rate is 2 percent and thereal GDP growth rate is 5...

Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent. The change in standard of living, as measured by the growth rate in real GDP per person, is

A) 7 percent.

B) 2.5 percent.

C) 5 percent.

D) 3 percent.

E) -3 percent.

Expert Solution

Option D

The approximate formula for real GDP per person or The change in the standard of living is:

=real GDP growth rate -The population growth rate

=5-2

=3%

The change in standard of living, as measured by the growth rate in real GDP per person, is 3%.

Rahul Sunny answered 2 years ago

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