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A true indicator of economic growth is:

  • A.Per capita income
  • B.Real GDP
  • C.Inflation
  • D.Employment

Answer: A

A true indicator of economic growth is per capita income, which measures the average income of each person and takes account of the growth in population, so it shows whether people are better off. Real GDP also measures output growth, and many economists use it, but the key prefers per capita income. Inflation and employment are not measures of growth. The key gives option A. Per capita income is total income divided by the population, so it allows for the growth of population.

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