Economic growth is defined as
A) an increase in the satisfaction of all people within a country.
B) an increase in per capita real GDP measured by its rate of change per year.
C) any increase in per capita nominal GDP measured by its rate of change per year.
D) an increase in the supply of money measured by its rate of change per year.

Question

Quizplus · Accepted Answer

Economic growth is commonly measured by an increase in real GDP per capita (i.e. accounting for inflation and population growth) over time. This can be calculated by taking the rate of change of real GDP per capita from one year to the next, and is often used as an indicator of a country's long-term economic health and development. A is incorrect because economic growth does not necessarily guarantee an increase in overall satisfaction for all people, as inequality and distributional issues can still persist. C is incorrect because nominal GDP does not account for inflation, and may not reflect actual changes in economic output. D is incorrect because an increase in the money supply alone does not necessarily translate into economic growth, and can even contribute to inflation if not managed properly.

Economic Growth Is Defined as