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Economics Q1

Economic growth refers to an increase in production of goods and services over time, as measured by gross domestic product. It leads to profits, job creation, and higher incomes. However, economic growth alone does not guarantee development. Economic development is a broader concept that reflects social and economic progress through creating greater freedom and opportunities for people. Key aspects of development include poverty reduction, access to education and healthcare, good governance, and sustainability of growth. While growth is necessary for development, it is not sufficient to ensure development.

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164 views1 page

Economics Q1

Economic growth refers to an increase in production of goods and services over time, as measured by gross domestic product. It leads to profits, job creation, and higher incomes. However, economic growth alone does not guarantee development. Economic development is a broader concept that reflects social and economic progress through creating greater freedom and opportunities for people. Key aspects of development include poverty reduction, access to education and healthcare, good governance, and sustainability of growth. While growth is necessary for development, it is not sufficient to ensure development.

Uploaded by

my Vinay
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

WRITE A SHORT NOTE ON ECONOMIC GROWTH VS ECONOMIC


DEVELOPMET.
ANS: Economic Growth

Economic growth is an increase in the production of goods and services over a specific
period. To be most accurate, the measurement must remove the effects of inflation.

Economic growth creates more profit for businesses. As a result, stock prices rise. That gives
companies capital to invest and hire more employees. As more jobs are created, incomes rise.
Consumers have more money to buy additional products and services. Purchases drive higher
economic growth. For this reason, all countries want positive economic growth. This makes
economic growth the most-watched economic indicator.

Gross domestic product is the best way to measure economic growth. It takes into account
the country's entire economic output. It includes all goods and services that businesses in the
country produce for sale. It doesn't matter whether they are sold domestically or overseas.

Growth doesn’t occur in isolation. Events in one country and region can have a significant
effect on growth prospects in another. For example, if there’s a ban on outsourcing work in
the United States, this could have a massive impact on India’s GDP, which has a robust IT
sector dependent on outsourcing.

Economic Development

Economic development is a broader concept than economic growth. Development reflects


social and economic progress and requires economic growth. Growth is a vital and necessary
condition for development, but it is not a sufficient condition as it cannot guarantee
development.

One of the most compelling definitions of development is that proposed by Amartya Sen.
According to Sen, development is about creating freedom for people and removing obstacles
to greater freedom. Greater freedom enables people to choose their own destiny. Obstacles to
freedom, and hence to development, include poverty, lack of economic opportunities,
corruption, poor governance, lack of education and lack of health

Economic Development is the expansion of capacities that contribute to the advancement of


society through the realization of individual, firm and community potential. Economic
Development is measured by a sustained increase in prosperity and quality of life through
innovation, lowered transaction costs, and the utilization of capabilities towards the
responsible production and diffusion of goods and services. Economic Development requires
effective institutions grounded in norms of openness, tolerance for risk, appreciation for
diversity, and confidence in the realization of mutual gain for the public and the private
sector. Economic Development is essential to creating the conditions for economic growth
and ensuring our economic future.

Economic Growth is not the same as Economic Development. Development alleviates people from
low standards of living into proper employment with suitable shelter. Economic Growth does not take
into account the depletion of natural resources which might lead to pollution, congestion & disease.
Development, however, is concerned with sustainability which means meeting the needs of the
present without compromising future needs.

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