This question was asked in very popular civil services examination.

Question is : Whether the following statement is correct or not? Statement : If a country is experiencing increase in its per-capita GDP, its GDP must necessarily be growing?

The approach I applied is that, in a country like Syria, if mass emigration happens then population will decrease and at the same time GDP might not decrease with same rate. so this statement will be false.

I know my assumption is not too correct, so ignoring that, please help me arrive in correct answer.

  • $\begingroup$ What do you mean your assumption is not correct? $\endgroup$
    – Giskard
    Jun 6 '17 at 13:56
  • $\begingroup$ I'm not good in such questions/topics, so I'm just afraid if this is right way to think or not. Moreover I didn't want this particular assumption to prevent better examples coming from more qualified people here. $\endgroup$
    – Maverick33
    Jun 6 '17 at 14:01
  • $\begingroup$ I am not sure I understand what you are asking, but if $G_p = G/(population)$ is the per-capita GDP then $G_p$ increases if the population shrinks or the GDP grows, as you pointed out. So the statement is not correct. $\endgroup$
    – Taufi
    Jun 6 '17 at 14:33
  • $\begingroup$ OP, your logic is correct, The statement is false, because the increase in GDP per capita could be due to a population decrease. $\endgroup$
    – BB King
    Jun 6 '17 at 14:34
  • 2
    $\begingroup$ Possible duplicate of Calculating rate of growth of per capita income $\endgroup$
    – luchonacho
    Jun 6 '17 at 15:59

Your reasoning seems correct.

if we consider that Gp=G/(population) and we know that Gp is increasing then we have the following possibilities:

  • if (population) is static or growing then we can conclude that G must necessarily be growing
  • if (population) is decreasing then G can be either static or actually decreasing slower than (population). In this case, the statement on the question fails

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.