Real GDP per capita rise signals improved average living standards

Steps:

• Observe real GDP per head increased from $20,000 to$21,000, showing higher average economic output per person.
• Recall real GDP per capita measures total real economic production divided by population, adjusted for inflation.
• Interpret the rise as indicating broader economic growth benefiting the average person.
• Evaluate options: only C directly links to this metric's implication for living standards.

Why C is correct:

• Real GDP per capita is a standard proxy for average living standards, so its increase means output per person rose, improving material well-being for the population on average.

Why the others are wrong:

• A: GDP per capita ignores income distribution; it only shows average output, not evenness.
• B: Informal economy activity typically understates official GDP; a rise suggests formal growth, not informal shifts.
• D: Real GDP is inflation-adjusted, so the increase reflects real growth, not inflation changes.

Final answer: C