Question

Write an essay describing the indicators of economic growth.

Answer 1

The extent to which a country has developed may be assessed by considering a range of narrow and broad indicators, including per capita income, life expectancy, education, and the extent of poverty. National income, output, and spending are three key variables that indicate whether an economy is growing, or in recession. Like many other indicators, income, output, and spending can also be measured in per capita (per head) terms.

Following are the main indicators of economic growth-

1. Gross Domestic Product (GDP)
2. Per Capita Income (PCI)
3. Per Capita Consumption (PCC)

1. Gross Domestic Product (GDP): It means economic growth implies increased output of goods and services. Here it is necessary to mention that the increase in GDP must be steady and long term.

2. Per Capita Income (PCI): An increase in PCI indicated an increase in economic growth. The PCI is obtained by dividing the national income of the country by its total population. A rise in Per Capita income is possible when the growth of national income is more than the growth of population.

3. Per Capita Consumption (PCC) : The main objective of every economy is to increase the standard of living and welfare of the people. This, in turn, depends upon a higher per capita consumption. Per capita consumption of a country is obtained by dividing the total private consumption expenditure by total population.