UPPSC PCS - 2013

The most appropriate measure of a country’s economic growth is its

Year Asked: 2013

A
Gross Domestic Product (GDP)
B
Net Domestic Product (NDP)
C
Net National Product (NNP)
D
Per Capital Product (PCP)

Correct Answer

D. Per Capital Product (PCP)

Detailed Explanation

The answer is D, per capita product (per capita income, in real terms). An aggregate figure can rise just because the population rises. Per capita income divides output by population, so it tells you whether the average person's command over goods and services is actually improving.

  • A) GDP: A correct measure of total output, and the headline figure for growth rates. But it is an aggregate. A 6% GDP rise with 6% population growth leaves average living standards unchanged, so it is less appropriate here.
  • B) NDP: GDP minus depreciation. It adjusts for capital wear but still ignores population, so it does not answer the question better.
  • C) NNP: GNP minus depreciation, adding net factor income from abroad. It captures national rather than domestic income, but it is still an aggregate and says nothing about per head gains.

Core concept: national income aggregates versus per capita measures. This links to Mains questions on inclusive growth and the gap between growth and development. Note that national accounts usually headline GDP growth rate, so the question's wording of 'most appropriate' is what points to per capita.

Trap: Picking GDP because it is the familiar headline number. The question asks for the most appropriate measure, and that is the one that accounts for population.

This question appeared in UPPCS 2013 GS Paper 1.

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