2001 General Studies, all questions
UPSC Prelims 2001 · General Studies
Question 68: Economy and Social Development
The most appropriate measure of a country’s economic growth is its
aGross Domestic Product
bNet Domestic Product
cNet National Product
dPer Capita Real Income
AnswerThe answer is (d).
Economic growth is best measured by the rise in per capita real income, because it removes the effect of price changes (real) and of population growth (per capita). GDP, NDP and NNP show the size of the economy, but a rise in them can come from rising prices or a larger population without people being better off. Remember: real per capita income shows whether the average person is better off.
Why each option is right or wrong
- (a) GDP in current prices can rise merely because of inflation or population.
- (b) NDP also does not adjust for population.
- (c) NNP also does not adjust for population or prices.
- (d) Right: per capita real income allows for both prices and population.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2001, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.