Question

Which of the following is generally regarded as the true index of economic growth?

• A. A sustained increase in real per capita income
• B. An increase in national income along with a corresponding increase in population
• C. An increase in national income at constant prices during a year
• D. An increase in national income at current prices over time

Answer 1

Answer: (A)

A sustained increase in real per capita income

An increase in the amount of goods and services produced per head of the population over a period of time is called economic growth. It includes increase in per capita production, per capita real income and structural change in economics. A sustained increase in real per capita income is the true index of economic growth. It talks about quantitative increase but not qualitative increase.