The best index of economic development is provided by
- AOption (a)
growth in national income at current prices
- BOption (b)
growth in per capita real income from year to year
- COption (c)
growth in savings ratio
- DOption (d)
improvement in balance of payments position
- EOption (e)
None of the above
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Correct answer
growth in per capita real income from year to year
Why this answer is correct
The correct answer is growth in per capita real income from year to year
Key Points
- The best Index of Economic Development is provided by Per capita, Gross National Product (GNP) Hence option 2 is correct.
- It can be derived by dividing the GNP of a country by its population. The higher the level of per capita income, the higher is the economic development.
- The World Bank, in its world development report 1998, classified the countries in the world on the bases of per capita GNP.