In macroeconomics, which of the following is something that GDP per capita does NOT show?

• A. The average value of goods and services produced per person in a year
• B. The overall level of market production in an economy, adjusted for population size
• C. The average standard of living measured by output per person over time
• D. How income is distributed across individuals within a country (inequality)

Answer: (D)

Verified step by step guidance

1. Step 1: Understand what GDP per capita measures. GDP per capita is calculated by dividing the total Gross Domestic Product (GDP) of a country by its population, which gives the average economic output per person.
2. Step 2: Recognize that GDP per capita reflects the average value of goods and services produced per person in a year, providing a measure of the overall market production adjusted for population size.
3. Step 3: Note that GDP per capita is often used as a proxy for the average standard of living or economic well-being of individuals in a country over time, as it shows output per person.
4. Step 4: Identify the limitation of GDP per capita: it does not provide any information about how income or wealth is distributed among individuals within the country, meaning it does not show income inequality.
5. Step 5: Conclude that while GDP per capita is useful for measuring average economic output and standard of living, it does NOT show the distribution of income across individuals, which requires other measures such as the Gini coefficient.