BUSINESS ADMINISTRATION
BUSINESS ENVIRONMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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population growth exceeds output
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imports exceed exports
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capital formation decreases
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output exceeds population growth
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Detailed explanation-1: -If output growth exceeds population growth for a country, then: Average living standards will increase.
Detailed explanation-2: -Economic growth means that an economy has increased its ability to produce more. When an economy is producing beyond potential output, it might have experienced an increase in real GDP, but that is not economic growth.
Detailed explanation-3: -Economic growth is measured by changes in a country’s Gross Domestic Product (GDP) which can be decomposed into its population and economic elements by writing it as population times per capita GDP. Expressed as percentage changes, economic growth is equal to population growth plus growth in per capita GDP.
Detailed explanation-4: -If the growth in population exceeds the growth in real GDP, real GDP per capita will fall.