What is the key measure used to track economic growth?

• A. Real GDP per capita
• B. Nominal GDP
• C. Nominal GDP per capita
• D. Real GDP

Answer: (A)

Tracking economic growth means seeing how the economy’s output grows over time after removing the effects of price changes and population. Real GDP per capita does exactly that: it uses real GDP (output adjusted for inflation) and divides by the population, giving the average output per person.

This matters because real GDP alone can rise simply because more people are consuming or because inflation pushes up nominal values. Real GDP removes inflation to show true growth in production, but without considering population, you might miss whether that growth is actually translating into higher living standards for people. Real GDP per capita combines both adjustments, so it reflects how much output each person, on average, can enjoy, which is a clearer measure of progress over time.