ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The rate of productivity growth is the primary determinant of an economy’s rate of long-term economic growth and higher wages. Over decades and generations, seemingly small differences of a few percentage points in the annual rate of economic growth make an enormous difference in GDP per capita.

Detailed explanation-2: -Annual growth rate of real Gross Domestic Product (GDP) per capita is calculated as the percentage change in the real GDP per capita between two consecutive years. Real GDP per capita is calculated by dividing GDP at constant prices by the population of a country or area.

Detailed explanation-3: -Economic growth – measured as an increase of people’s real income – means that the ratio between people’s income and the prices of what they can buy is increasing: goods and services become more affordable, people become less poor.

Detailed explanation-4: -What Is an Economic Growth Rate? An economic growth rate is the percentage change in the value of all of the goods and services produced in a nation during a specific period of time, as compared to an earlier period. The economic growth rate is used to measure the comparative health of an economy over time.

Detailed explanation-5: -Economic growth brings quantitative changes in the economy. Economic growth reflects the growth of national or per capita income. Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes).