Economic growth is usually defined as
A) the rate of increase in output divided by the increase in labor.
B) the increase in output over time, as measured by real per capita Gross Domestic Product (GDP).
C) the increase in input availability.
D) the reduction in the real cost of necessities.

Question

Quizplus · Accepted Answer

Economic growth is the increase in output of goods and services in an economy over a period of time. Real per capita GDP measures the increase in output of goods and services in an economy per person adjusted for inflation, which gives a better understanding of the standard of living of the population. Option A is incorrect as labor is one of the inputs in the production process and not the output. Option C may increase the availability of production inputs but it does not necessarily lead to an increase in output. Option D may improve the standard of living but it does not necessarily lead to an increase in output.

Economic Growth Is Usually Defined as