QUESTION 43 (5 marks)
Real GDP rises from $2400 billion to $2496 billion, while population rises from 24 million to 25.2 million. Calculate real GDP per capita in each period and its percentage change. Explain why a government should not use total GDP growth alone to judge living standards.
Practice marking scheme
Answer
$100 000 to approximately $99 047.62 per person; a fall of approximately 0.95%.
Working
Real GDP per capita is 2400 billion/24 million = $100 000 and 2496 billion/25.2 million = $99 047.62. The change is −0.95238%. Total real GDP grows 4% but population grows 5%. Average production per person falls; income distribution, unpaid activity and environmental costs are also omitted from this measure.
Marking criteria
- Calculates both per-capita levels with correct units. [2 marks]
- Calculates approximately −0.95%. [1 mark]
- Explains population growth and another living-standards limitation. [2 marks]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabusCompare your working with the guide above.