Question

Increase in absolute and per capita real GNP do not connote a higher level of economic development, if

• A. industrial output fails to keep pace with agricultural output
• B. agricultural output fails to keep pace with industrial output
• C. poverty and unemployment increase.
• D. imports grow faster than exports

Answer 1

The correct option is C poverty and unemployment increase.

Economic development also includes human development. There are situations where the numbers related to growth like GNP increase but the employment data and Poverty data might not change or can decline. This situation is called jobless growth. This can also happen when technology replaces human labour. Such a situation leads to concentration of wealth in the hands of a few increasing inequality in the society and economy.