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ECON 105

What makes an economy grow over time?

Explore growth per person, productivity and why countries can catch up. Move production curves and growth paths, then work through ten Solve questions.

Growth per person · Step 1 of 12

A bigger economy does not always mean more per person

Northland: real GDP per person
05,00010,00015,00020,000Real outputStartNow
Start: 20,000Now: 20,000
Northland is an invented economy with 60 residents. Real GDP values output at constant prices, so price increases do not count as growth here. Divide real GDP by residents to find real GDP per capita.
Try it: Move total real GDP and watch the amount available per person.
Northland real GDP ($)$1,200,000
Real GDP
$1,200,000
People
60
Per person
$20,000
Real GDP per capita = real GDP ÷ population.
$1,200,000 ÷ 60 = $20,000 per person.
Check yourself
If GDP and population both double, what happens to GDP per capita?

Exam coming up and economic growth still feels confusing?

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