Answer to Question #138388 in Macroeconomics for tom

Question

State whether each of following statements is “True” or “False” (Explain why if the
statement is false.)
A. When the GDP growth rate is 3% and its population growth is 4%, its GDP
per capita is higher.
B. Businessmen can make more profit by selling their goods in a country with a
higher GDP growth rate than a country with a lower GDP growth rate.

Answer 1

Statement A is false.

When the GDP growth rate is 3%and it's population is 4%there is a lower GDP per capital.

GDP per capita shows a countries economic output per person.

In this case the population percentage is higher than the GDP percentage .

When we divide the GDP percentage by the population percentage,we get alower GDP per capita.

Statement B is true.

Business can make more profit by selling there goods in a country with lower GDP growth rate .

Countries with lower GDP is likely not able to produce there own goods due to there poor economic growth .Therefore they will tend to import more .

With the increased demand , the exporting business makes more profit.