why might you be interested in per capita real GDP rather than real GDP? and why...

why might you be interested in per capita real GDP rather than real GDP? and why might you be interested in real GDP rather than per capita real gdp?

Expert Solution

The gross domestic product (GDP) can be defined as the market value of all final goods and services produced in the domestic territory of the in the current financial year.

Real gross domestic product (GDP) is an inflation-adjusted measure which shows the value of all goods and services produced by an economy in a given year, expressed in base-year prices.

So if the real GDP is increasing, then it means that the production of goods and services are increasing over a period of time.

Per capita real GDP= Real GDP / population

So many economist might be interested in per capita real GDP rather than real GDP because if per capita is increasing, then it means per capita availability of goods and services are increasing. It might be either real GDP growth is faster than the population growth or population is decreasing and Real GDP is constant.

We might be interested in the real GDP because if Real GDP is increasing, then it means production of goods and services are increasing and employment is also increasing. But if we only consider per capita real GDP, then it can increase even if the population decreases and real GDP remains constant.

Rahul Sunny answered 2 years ago

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