O Levels Economics (2281)•2281/11/M/J/21

Explanation
Defining Economic Growth
Steps:
- Recall the standard economic definition: growth measures a sustained increase in real output over time.
- Evaluate options against this: check if each aligns with rising GDP or production potential.
- Eliminate unrelated factors like inflation, trade, or demographics.
- Confirm the match with productive capacity as the core indicator.
Why D is correct:
- Economic growth is defined as an expansion in a nation's ability to produce goods and services, often measured by rising real GDP, which reflects increased productive capacity.
Why the others are wrong:
- A: Inflation reduction stabilizes prices but does not indicate output growth.
- B: Export increases boost trade but may not reflect overall domestic production.
- C: Population growth affects demand but not necessarily productive efficiency or output per capita.
Final answer: D
Topic: Economic growth
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