Difference Between Economic Growth and Economic Development (Explained with MCQs)
Economic growth and development are fundamental concepts in economics that every student should understand. They are not only crucial for excelling in school and competitive exams like CBSE, UPSC and CA Foundation, but also for making sense of national progress and policy debates. Below, we explore the topic deeply, clarify confusing terms, and provide practice MCQs to make your preparation easy and effective.
| Aspect | Economic Growth | Economic Development |
|---|---|---|
| Definition | Increase in output and income (GDP/GNP) over time | Overall improvement in living standards, includes growth and quality of life |
| Measurement | GDP, GNP, National Income | HDI, PQLI, literacy, health, equality indicators |
| Nature | Quantitative | Quantitative & Qualitative |
| Focus | Earning and production increase | Welfare, equity, sustainability |
| Time Span | Short–medium term | Long-term holistic change |
MCQs on Economic Growth and Development
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Which statement best defines economic growth?
(A) Increase in real output of goods and services over time
(B) Reduction in poverty
(C) Growth in population
(D) Widespread equality
Answer: (A) – Economic growth refers to the increase in a country’s output. -
Which of the following is an indicator of economic development, not just growth?
(A) GDP per capita
(B) Human Development Index (HDI)
(C) National Income
(D) Output per worker
Answer: (B) – HDI includes health, education, and income. -
The Harrod-Domar model is related to:
(A) Income distribution
(B) Capital formation and growth rate
(C) Labour surplus
(D) Inflation
Answer: (B) – It shows how savings and investment drive growth. -
Which of these is considered a non-economic factor in economic development?
(A) Literacy rate
(B) Per capita income
(C) Technological advancement
(D) Investment rate
Answer: (A) – Literacy is a qualitative, non-economic factor. -
The Lorenz curve is used to represent:
(A) National output
(B) Unemployment rate
(C) Income inequality
(D) Capital formation
Answer: (C) – Lorenz curve graphically shows income distribution.
Key Theories and Indicators for Revision
| Theory / Indicator | Main Principle | Exam Importance |
|---|---|---|
| Harrod-Domar Model | Growth through savings and investment | CBSE, UPSC, Competitive MCQs |
| Lewis Dual-Sector Model | Transfer of labor from agriculture to industry | Conceptual MCQs, application-based |
| Human Development Index (HDI) | Health, education, and income | Measurement-based MCQs |
| Physical Quality of Life Index (PQLI) | Life expectancy, infant mortality, literacy | Indicators and evaluation MCQs |
| Lorenz Curve | Graphical tool for income inequality | Application/interpretation MCQs |
Difference Between Economic Growth and Economic Development
Economic growth is purely about numbers—how much a nation produces. Economic development focuses on quality—how healthy, educated, and equitable the society becomes. For most MCQs, remember: growth is quantity, development is quantity plus quality.
Use Cases: Exams, Business, Daily Life
Understanding economic growth and development helps for CBSE and UPSC Economics papers, college entrance, and competitive business exams. In real life, these concepts guide decisions on policy, investment, and welfare. For example, a business leader would focus on GDP for profits, but on development indicators for worker satisfaction and social stability.
Download MCQs on Economic Growth and Development PDF
Want to revise offline or print for your study group? Download the MCQ PDF here (free, direct link) for easy and effective practice.
Related Commerce Concepts
- Difference Between Economic Growth and Economic Development
- National Income
- Methods of Measuring National Income
- Human Capital Formation
- GDP and Welfare
- Infrastructure and Economic Development
- Lorenz Curve
- Sustainable Development
At Vedantu, we simplify commerce and economics so students can excel in their exams and understand real-world issues. Whether for CBSE, competitive exams, or practical business life, knowing the differences, models, and indicators behind economic growth and development is crucial. Regular MCQ practice builds confidence and ensures strong results.
In summary, economic growth and development are related but distinct concepts. Growth means more production; development means better quality of life for all. Master definitions, indicators, and key theories through tables, MCQs, and revision to succeed in exams and practical business decisions.
FAQs on Economic Growth and Development: MCQs with Answers and Explanations
1. What is the difference between economic growth and economic development?
Economic growth refers to an increase in a country's GDP over time, typically measured by the rate of increase in real national income. Economic development, however, is a broader concept encompassing growth plus improvements in various social indicators like life expectancy, education levels (HDI), and poverty reduction. It involves structural changes, improved living standards, and overall societal well-being. Essentially, growth is a subset of development.
2. Which indicators are used to measure economic development in MCQs?
Several indicators gauge economic development. Key indicators frequently appearing in MCQs include:
- Gross Domestic Product (GDP) per capita: Measures average income.
- Human Development Index (HDI): Considers life expectancy, education, and standard of living.
- Physical Quality of Life Index (PQLI): Focuses on literacy rate, life expectancy at age one, and infant mortality rate.
- Gini coefficient: Measures income inequality.
- Poverty rate: Percentage of population below the poverty line.
3. Where can I download MCQs on economic growth and development with answers in PDF?
Many websites offer downloadable PDFs containing MCQs on economic growth and development with answers. Look for reputable educational resources or study materials that align with your syllabus. Ensure the source is credible and the questions reflect current exam patterns.
4. What theories are important for economic growth MCQs?
Several economic growth theories are vital for MCQs. Key theories include:
- Harrod-Domar model: Focuses on the role of savings and investment.
- Solow-Swan model: Emphasizes technological progress and capital accumulation.
- Lewis model: Explains development through labor transitions from agriculture to industry.
- Endogenous growth theory: Highlights the role of innovation and human capital.
5. How do I use MCQs to prepare for competitive exams like UPSC or CA Foundation?
MCQs are an excellent way to prepare for competitive exams like UPSC or CA Foundation. Consistent practice helps reinforce concepts and identify weaknesses. Focus on understanding the underlying principles rather than rote memorization. Use past papers and mock tests for effective preparation. Targeting areas like national income accounting, development indicators, and economic theories will ensure comprehensive coverage.
6. What is the role of non-economic factors in economic growth MCQ quizzes?
Non-economic factors significantly influence economic growth, often overlooked. Key non-economic factors include:
- Political stability: Stable governance fosters investment and growth.
- Social factors: Education, health, and social equality impact productivity.
- Technological advancement: Innovation drives efficiency and productivity gains.
- Environmental factors: Sustainable practices ensure long-term growth.
- Institutional factors: Effective institutions support markets and growth.
7. Can MCQ practice help clarify confusions between terms like GDP and GNP?
Yes, MCQ practice can greatly help in clarifying differences between terms like GDP and GNP. Through application-based questions, you gain a clearer understanding of these terms, their nuances, and the contexts in which they are relevant. This improves analytical skills and problem-solving abilities when dealing with such concepts.
8. How does the Lewis dual-sector model explain economic development in MCQ context?
The Lewis dual-sector model explains economic development by focusing on the labor transition from a traditional, low-productivity agricultural sector to a modern, high-productivity industrial sector. MCQs might test your understanding of its assumptions, predictions, and limitations, such as the assumption of surplus labor in agriculture and the role of industrial expansion in driving overall growth. This model often features in questions around labor markets and structural change.
9. What are effective strategies for solving application-based MCQs on economic development?
To effectively solve application-based MCQs on economic development, focus on understanding core concepts, analyzing case studies, and practicing with diverse scenarios. Break down complex problems into manageable parts. Pay attention to keywords and qualifying phrases. Use process of elimination and test out different scenarios. Consistent practice with varied question types improves your confidence.
10. Why are downloadable MCQ PDFs important for students without continuous internet?
Downloadable MCQ PDFs are essential for students lacking consistent internet access. They provide offline access to practice questions for revision and self-assessment. This supports exam preparation irrespective of internet connectivity issues. PDFs also enable students to study during commutes, travel, or in areas with limited or no internet access.
