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.
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Second, the population grew by 40 percent. Third, prices rose by 100 percent, which means the real GDP (which is nominal GDP adjusted for inflation) increased by 100 percent. So, if we adjust the nominal GDP growth (200 percent) for inflation (100 percent), Show more…
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