Consider the following statements regarding 'Economic Growth': 1. It refers to the decrease in the country's capacity to produce output. 2. A good indicator of economic growth is the steady increase in the Gross Domestic Product (GDP). 3. Growth implies a larger stock of productive capital or supporting services. Which of the statements given above is/are correct?

Correct Option The correct option is 2 and 3 only. Explanation Economic Growth refers to the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is a quantitative measure that indicates an expansion in an economy's productive capacity. Statement-wise Analysis - Statement 1 is Incorrect: Economic growth refers to an increase, not a decrease, in a country's capacity to produce output. It signifies a rise in the production of goods and services within an economy compared to a previous period. - Statement 2 is Correct: The Gross Domestic Product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. A steady increase in GDP is the most widely accepted indicator of economic growth. - Statement 3 is Correct: Economic growth implies an expansion of the economy's production possibility frontier. This requires a larger stock of productive capital (such as machinery, factories, and technology) and an increase in supporting services (such as transport, banking, and communication infrastructure) to facilitate higher output. Key Takeaway Economic Growth is a quantitative concept measured primarily by the steady rise in GDP or GNP, driven by capital formation and the expansion of supporting infrastructure.

NCERT Class 11 Economics — Chapter 2: Indian Economy (1950-1990)

mcqeasy

Consider the following statements regarding 'Economic Growth':

It refers to the decrease in the country's capacity to produce output.
A good indicator of economic growth is the steady increase in the Gross Domestic Product (GDP).
Growth implies a larger stock of productive capital or supporting services.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A1, 2 and 3
B2 and 3 only
C1 and 2 only
D2 only

Did you get this right?

Solution

Correct Option

The correct option is 2 and 3 only.

Explanation

Economic Growth refers to the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is a quantitative measure that indicates an expansion in an economy's productive capacity.

Statement-wise Analysis

Statement 1 is Incorrect: Economic growth refers to an increase, not a decrease, in a country's capacity to produce output. It signifies a rise in the production of goods and services within an economy compared to a previous period.
Statement 2 is Correct: The Gross Domestic Product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. A steady increase in GDP is the most widely accepted indicator of economic growth.
Statement 3 is Correct: Economic growth implies an expansion of the economy's production possibility frontier. This requires a larger stock of productive capital (such as machinery, factories, and technology) and an increase in supporting services (such as transport, banking, and communication infrastructure) to facilitate higher output.

Key Takeaway

Economic Growth is a quantitative concept measured primarily by the steady rise in GDP or GNP, driven by capital formation and the expansion of supporting infrastructure.

Your note

More from Chapter 2: Indian Economy (1950-1990)

Consider the following statements regarding 'Modernisation' as a planning goal: 1. It implies the adoption of new technology to increase output. 2. It strictly excludes changes in social outlook. 3. It does not strictly prohibit the use of traditional methods if they are efficient. Which of the statements given above is/are correct?

medium

What was the primary effect of the 'inward looking trade strategy' on the Indian consumer?

medium

Which of the following statements about the 'First Five Year Plan' is correct?

medium

Which of the following was a major loophole in the 'Land Ceiling' legislation? 1. Big landlords voluntarily surrendered their excess land without legal challenge. 2. Landlords registered lands in the names of close relatives to escape the ceiling. 3. The legislation faced hurdles in implementation across many states.

medium

Which of the following was a negative outcome of the 'Permit License Raj'?

medium

Keep practising Chapter 2: Indian Economy (1950-1990)

Work through every question from this NCERT chapter.

Browse all NCERT Class 11 Economics chapters

Correct Option

The correct option is 2 and 3 only.

Explanation

Statement-wise Analysis

Statement 1 is Incorrect: Economic growth refers to an increase, not a decrease, in a country's capacity to produce output. It signifies a rise in the production of goods and services within an economy compared to a previous period.
Statement 2 is Correct: The Gross Domestic Product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. A steady increase in GDP is the most widely accepted indicator of economic growth.
Statement 3 is Correct: Economic growth implies an expansion of the economy's production possibility frontier. This requires a larger stock of productive capital (such as machinery, factories, and technology) and an increase in supporting services (such as transport, banking, and communication infrastructure) to facilitate higher output.

Key Takeaway

Economic Growth is a quantitative concept measured primarily by the steady rise in GDP or GNP, driven by capital formation and the expansion of supporting infrastructure.