Economic growth is best deﬁned as an increase in

Question

Quizplus · Accepted Answer

Economic growth refers to an increase in the production of goods and services produced by an economy, which can be measured by either real GDP (the value of all goods and services produced adjusted for inflation) or real GDP per capita (the value of all goods and services produced adjusted for inflation and divided by the population). These measures take into account both the quantity and quality of goods and services produced, which is why they are the best choices. Nominal GDP is not the best choice because it does not account for changes in the price level, which can distort the true level of economic growth. Total consumption expenditures and wealth in the economy can increase without necessarily indicating economic growth, as they may be the result of other factors such as inflation or changes in distribution.

Economic Growth Is Best Deﬁned as an Increase in