Adjusting GDP for Per Capita and Real Terms

Steps:

• GDP totals economic output of a country, but raw figures ignore population size.
• Divide by population to get GDP per capita, measuring average living standards.
• Adjust for inflation to express in constant prices, enabling fair comparisons over time or across nations.
• Thus, adjustments for population change and inflation yield the best comparative measure.

Why D is correct:

• Real GDP per capita (nominal GDP adjusted for inflation and divided by population) directly reflects average economic well-being per person, per standard economic definitions.

Why the others are wrong:

• A: Exports are already in GDP calculation; inflation adjustment helps, but exports do not address living standards per person.
• B: Population adjustment is key, but exports do not impact per capita comparisons.
• C: Imports and exports net to net exports in GDP; this does not adjust for population or price changes.

Final answer: D