UPSC Prelims 2001·GS1·economy·basic concepts

The most appropriate measure of a country’s economic growth is its

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Last updated 23 May 2026, 3:31 pm IST
  1. AGross Domestic Product
  2. BNet Domestic Product
  3. CNet National Product
  4. DPer Capita Real IncomeCorrect

Explanation

The correct answer is D because Per Capita Real Income accounts for both inflation and population growth. While Gross Domestic Product measures the total economic output of a country, it does not reflect the standard of living or the well being of the individual citizen. For example, a countrys economy might grow by five percent, but if its population also grows by five percent, the average persons economic condition remains unchanged. Real Income refers to income adjusted for inflation, ensuring that the growth represents an actual increase in purchasing power rather than just rising prices. Therefore, Per Capita Real Income is the most effective indicator of the average economic welfare and the true pace of development in a nation.
economy: The most appropriate measure of a country’s economic growth is its
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