Answer to Question #77604 in Macroeconomics for sadiki porteous

Question

Why is growth in GDP different from growth in a nation's standard of living? Is it possible for a nation's GDP to grow while its standard of living falls?

Answer 1

Growth in GDP per capita is usually used to show the growth in a nation's standard of living. It is possible for a nation's GDP to grow while its standard of living falls, if population growth rate is higher than GDP growth rate. In this case GDP per capita will decrease.