Which term best describes increases in real GDP without achieving broad-based living standard improvements?

• A. Economic growth
• B. Economic development
• C. Growth without development
• D. Sustainable growth

Answer: (C)

The main idea being tested is the distinction between growth of output and improvements in living standards. Real GDP rising means the economy is producing more goods and services, but that doesn’t guarantee that people’s lives are getting better across the board. When the increase in real GDP does not translate into broad-based gains in income, health, education, or overall welfare for the majority, we describe it as growth without development.

This term is the best fit because it captures the mismatch: growth refers to the larger size of the economy, while development refers to meaningful improvements in living standards for a wide portion of the population. If gains are concentrated among a small group, or if population growth outpaces output, average living standards may stagnate even as GDP grows.

Other options describe different ideas: economic growth focuses on increasing real GDP without implying anything about welfare distribution; economic development emphasizes broad welfare improvements; sustainable growth concerns whether growth can continue long-term without depleting resources or harming the environment.