JAMB Economics 2011 Paper

Concept:Economic growth is a rise in the total output of goods and services in an economy over time.An indicator of growth should reflect changes in aggregate production or national income.Explanation:To assess growth, economists compare the Gross Domestic Product ($\mathrm{GDP}$) of different periods.An increase in $\mathrm{GDP}$ at market price means the money value of all final goods and services produced in the country has gone up.This increase can come from higher consumer spending, more investment, greater government expenditure, or improved production.The $\mathrm{GDP}$ gap shows unused productive capacity, not actual growth.$\mathrm{GDP}$ at factor cost is an income-based measure and is not the best direct indicator of growth.The $\mathrm{GDP}$ deflator is a price index used to adjust for inflation, so it does not by itself show growth.Therefore, the clearest sign of economic growth over time is an increasing $\mathrm{GDP}$ measured at market prices.Answer:C. $\mathrm{GDP}$ at market price