Question

The per capita income of a state would decrease if:

• A. The Gross State Domestic Product (GSDP) of the state enters a period of continuous contraction.
• B. A large portion of the working-age population faces long-term unemployment and underemployment.
• C. The state experiences a drastic reduction in remittances from its non-resident population and a decline in foreign investments.
• D. The population grows faster than the GSDP.

Answer 1

Answer:

D. The population grows faster than the GSDP.

• If the denominator (population) grows at a higher rate than the numerator (GSDP), the resulting quotient (per capita income) will decrease.