between countries

• Why is GDP per capita used for comparisons between countries?

  It accounts for population differences in living standards
• What does an increase in total GDP not necessarily indicate?

  It does not necessarily indicate higher living standards
• What is the formula for GDP per capita?

  GDP per capita = Total GDP / Population
• What can cause GDP to increase without improving living standards?

  An increase in prices due to inflation
• Why do real GDP figures need to be calculated?

  To account for inflation differences across countries
• What is inflation?

  It is the rate at which prices increase
• How does inflation affect the interpretation of GDP figures?

  It can distort the real economic growth perception