What is implied by economic growth?

Economic growth is primarily indicated by an increase in national income, often measured by the rise in Gross Domestic Product (GDP). This increase in national income reflects a growing economy where the overall output of goods and services increases over time. As businesses produce more, they typically invest in new projects, leading to more jobs and improved living standards.

When there is economic growth, it usually suggests that the country is becoming more efficient at utilizing its resources, leading to higher productivity levels. This not only benefits businesses and the government through increased revenue but also enhances the well-being of its citizens by creating more opportunities and better services.

Options that mention decreases in inflation rates, higher unemployment rates, or stagnation of prices do not accurately describe economic growth. In fact, decreases in inflation can occur during various economic phases, including recessions, and are not inherently tied to growth. Higher unemployment rates usually indicate a struggling economic environment rather than growth. Stagnation of prices suggests a lack of economic activity and can accompany economic downturns, not growth. Therefore, the correct understanding of economic growth is closely tied to the increase in national income.