If real GDP doubles and population doubles, what happens to GDP per capita?

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Prepare for the Rutgers Macroeconomics Test with multiple choice questions, hints, and explanations. Master key concepts and excel in your exam!

Multiple Choice

If real GDP doubles and population doubles, what happens to GDP per capita?

Explanation:
GDP per capita is real GDP divided by the population. If both real GDP and population double, the ratio stays the same because the doubling factors cancel out. For example, real GDP = 1,000 with population = 100 gives GDP per capita = 10. If both double to 2,000 and 200, GDP per capita is 2,000 / 200 = 10. So it remains unchanged. It would rise only if GDP grew faster than population and fall if population grew faster than GDP.

GDP per capita is real GDP divided by the population. If both real GDP and population double, the ratio stays the same because the doubling factors cancel out. For example, real GDP = 1,000 with population = 100 gives GDP per capita = 10. If both double to 2,000 and 200, GDP per capita is 2,000 / 200 = 10. So it remains unchanged. It would rise only if GDP grew faster than population and fall if population grew faster than GDP.

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