Economic Growth And Development — Flashcards

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Economic growth means an increase in the size or magnitude of economic variables such as national output, income, capital, industries, savings, and investment within a year. It is a quantitative conce…

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GDP stands for Gross Domestic Product. It is the total value of final goods and services produced in an economy during one year. It is the main quantitative measure used to judge economic growth.

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Real GDP is measured at constant prices, so it removes the effect of inflation. This shows the real change in output instead of a mix of output change and price change.

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Growth of GDP in absolute terms is called economic growth. Growth in relative terms is called growth rate. Growth rate is usually expressed as a percent per annum.

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Economic growth focuses only on income and the amount of goods and services produced. It is single-dimensional and does not show how income is distributed among people.

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Economic growth can happen without development when GDP rises but most people do not get better living conditions. This happens because growth only shows higher output, not fair distribution or social…

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Economic growth can be generated in four main ways: increase in physical capital goods, technological improvement, growth of labour force, and increase in human capital.

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A larger stock of physical capital increases productivity. Better tools, machines, transport, banking, and communication services help produce more output with the same labour.