Economic Growth Benefits Individuals and the Economy

Steps:

• Define economic growth as an increase in real GDP, leading to more production and resources.
• Identify benefits for individuals: expanded choices in goods and services due to higher output.
• Identify benefits for the economy: higher incomes boost tax revenues without raising rates.
• Evaluate choices against these outcomes to select the matching pair.

Why B is correct:

• Economic growth raises real GDP per capita, increasing product variety through innovation and scaling production, while higher incomes and activity generate more government tax revenue per the tax base expansion principle.

Why the others are wrong:

• A: Growth reduces absolute poverty by lifting incomes, not increasing it; inflation isn't a direct consequence.
• C: Growth typically boosts exports via competitiveness, not reduces revenue.
• D: Growth correlates with lower unemployment via demand; it raises, not reduces, living standards.

Final answer: B