Per capita GDP of a country is the total GDP divided by the:

• A. labor force
• B. number of households
• C. population
• D. number of firms

Answer: (C)

Verified step by step guidance

1. Understand the definition of per capita GDP: it measures the average economic output per person in a country.
2. Recall that total GDP represents the total value of all goods and services produced within a country in a given period.
3. Identify the denominator used to calculate per capita GDP, which should reflect the number of people among whom the GDP is distributed.
4. Recognize that the labor force, number of households, and number of firms are different economic aggregates but do not represent the total population.
5. Conclude that per capita GDP is calculated by dividing total GDP by the total population, as it gives the average output per person.