Answer on Macroeconomics Question for maggy
increase in the quality of resources (by education etc.), increase in the quantity of resources & improvements in technology or in another way an increase in the value of goods and services produced by every
sector of the economy. Economic Growth can be measured by an increase in a
country's GDP (gross domestic product).
Economic development is a normative concept i.e. it applies in the context of people's sense of morality (right and wrong, good and bad). The definition of economic development given by
Michael Todaro is an increase in living standards, improvement in self-esteem
needs and freedom from oppression as well as a greater choice. The most accurate
method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy which affect productivity and could lead to Economic Growth. It also leads to the creation of more
opportunities in the sectors of education, healthcare, employment and the
conservation of the environment.It implies an increase in the per capita income of every citizen.
Economic Growth does not take into account the size of the informal economy. The informal
economy is also known as the black economy which is unrecorded economic activity. Development alleviates people from low standards of living into proper
employment with suitable shelter. Economic Growth does not take into account the
depletion of natural resources which might lead to pollution, congestion &
disease. Development however is concerned with sustainability which means
meeting the needs of the present without compromising future needs. These
environmental effects are becoming more of a problem for Governments now that
the pressure has increased on them due to Global warming.
Economic growth is a necessary but not sufficient condition of economic development.
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