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Suppose that over the last twenty-five years a country's nominal GDP grew to three times its former size. In the meantime, population grew by 40 percent and prices rose by 100 percent. What happened to real GDP per person?a. It more than doubled.b. It increased, but it less than doubled.c. it was unchanged.d. It decreased.

Respuesta :

Answer: Option (b) is correct.

Explanation:

Correct option: It increased, but it less than doubled.

The real GDP of U.S. is almost five times of the real GDP 50 years ago, still GDP is approximately same as it was 25 years ago. Population has also become less than doubled.

The nominal GDP adjusted for inflation is the real GDP. It is given that, nominal GDP grew to three times its former size and prices rose by 100 percent which means that inflation is doubled.

The real GDP is about 1.5 times, since the population is 1.4 times than what it was previously. Therefore, real GDP per capita increased but less than doubled.

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