Question

What is considered economic growth?

i. The increase in the production of goods and services in an economy

ii. The increase in the gross domestic product of a country compared to the previous year

• A. i only
• B. ii only
• C. Both i and ii
• D. Neither i nor ii

Answer 1

Answer:

C. Both i and ii

• Economic growth is a fundamental concept in economics that refers to the sustained increase in the economic output of a country over time. Let's analyze both statements:

• Statement i: "Increase in the production of goods and services in an economy" - This is correct. Economic growth is essentially measured by the increase in the total production of goods and services within an economy. When more goods and services are produced, it indicates that the economy is expanding and growing.

• Statement ii: "Increase in the gross domestic product of a country over the previous year" - This is also correct. GDP (Gross Domestic Product) is the primary indicator used to measure economic growth. It represents the total monetary value of all finished goods and services produced within a country's borders in a specific time period. When GDP increases from one year to the next, it indicates positive economic growth.

• Both statements are accurate definitions of economic growth. Economic growth occurs when there is an increase in the production capacity of an economy, which is reflected in higher GDP figures. Countries strive for consistent economic growth as it generally leads to improved living standards, increased employment opportunities, and better overall economic conditions for their citizens.

• Therefore, both statement i and statement ii correctly describe what can be considered as economic growth.