Question

4. What do you understand by economic growth and economic development ? Differentiate
clearly.​

Answer 1

Economic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, we would expect economic growth to enable more economic development.

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Answer 2

Answer:

$\red{ \bold { \underline{What \: is \: Economic \: Growth?}}}$

Economic growth can be defined as an increase in the value of goods and services produced in an economy over a period of time. This value calculation is done in terms of % increase in GDP or Gross Domestic Product.

$\red{ \bold{ \underline {What \: is \: Economic \: Development?}}}$

The term economic development can be explained as the process by which the economic well-being and quality of life of a nation, community, or particular region are improved according to predefined goals and objectives.

Economic development is a combination of market productivity and welfare values of the nation.

$\huge \blue {Difference \: Between \: Economic \: Growth \: and \: Economic \: Development</h3><h3></h3><h3>}$

$\bold \red{Economic \: Growth}$

$\underline \pink{Definition}$

Increase in the monetary growth of a nation in a particular period

$\underline \pink{Span \: of \: Concept}$

It is a narrower concept than Economic Development

$\underline \pink{Scope}$

It is a uni-dimensional approach which deals with the economic growth of the nation

$\underline \pink {Term}$

Short-term process

$\underline \pink{Measurement}$

Quantitative

$\underline \pink{Government Support}$

It is an automatic process that may or may not require intervention from the government

$\underline \pink{Kind \: of \: changes \: expected}$

Quantitative changes

$\underline \pink{Examples}$

GDP, GNP

$\bold \red{Economic Development}$

$\underline \blue{Definition}$

It refers to the overall development of the quality of life in a nation which includes economic growth

$\underline \blue{Span of Concept}$

It is a broader concept than Economic Growth

$\underline \blue{Scope}$

It is a multi-dimensional approach that looks into the income and as well as the quality of life of the nation

$\underline\blue{Term}$

process Long-term process

$\underline \blue{Measurement}$

Both Quantitative and Qualitative

$\underline \blue{Applicable \: to}$

Developing Economies

$\underline \blue {Government \: Support}$

It requires intervention from the government as all the developmental policies are formed by the government

$\underline \blue{Kind \: of \: changes \: expected}$

Quantitative as well as qualitative changes

$\underline\blue{Examples}$

Per capita Income, Industrial Development

Explanation:

$\huge \orange{ LET'S \: EXPLORE \: MORE}$

$\bold \green{Factors \: influencing \: Economic \: Growth}$

• Human resources – this is a major factor that is responsible for boosting the economic growth of a country. The rate of increase in the skills and capabilities of a workforce ultimately increases the economic growth of a country.

• Infrastructure development- Improvements and increased investment in physical capital such as roadways, machinery, and factories will increase the efficiency of economic output by reducing the cost.

Planned utilization of natural resources – Proper use of available natural resources like mineral deposits helps boost the productivity of the economy.

• Population growth – An increase in the growth of the population will result in the availability of more human resources which in turn will increase the output in terms of quantity. This is also an important factor that influences economic growth.

• Advancement in technology – Improvement in technology will affect the economic growth of a country positively. The application of advanced technology will result in increased productivity of labor and economic growth will advance at a lower cost.

$\bold \red{Factors \: Affecting \: Economic \: development}$

• Infrastructural improvement – Development in the infrastructure improves the quality of life of people. Therefore, an increase in the rate of infrastructural development will result in the economic development of a nation.

• Education – Improvement in literacy and technical knowledge will result in a better understanding of the usage of different equipment. This will increase labor productivity and in turn, will result in the economic development of a nation.

• Increase in the capital – Increase in capital formation will result in more productive output in an economy and this will affect the economic development positively.