ECN 004 (Online Discussion/Quiz 1– 10-5-2022)—Economic Growth, Development and Standard of Living

1. What do understand by the Concepts of Economic Growth and Economic development? Discuss this in details.
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy over time. Statisticians conventionally measure such growth as the percent rate of increase in the real gross domestic product, or real GDP.
Growth is usually calculated in real terms – i.e., inflation-adjusted terms – to eliminate the distorting effect of inflation on the prices of goods produced. Measurement of economic growth uses national income accounting. Since economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure. The economic growth-rates of countries are commonly compared using the ratio of the GDP to population (per-capita income).

The “rate of economic growth” refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time. This growth rate represents the trend in the average level of GDP over the period, and ignores any fluctuations in the GDP around this trend.

In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.
The term has been used frequently in the 20th and 21st centuries, but the concept has existed in the West for far longer. “Modernization”, “Westernization”, and especially “industrialization” are other terms often used while discussing economic development. Historically, economic development policies focused on industrialization and infrastructure, but since the 1960s, it has increasingly focused on poverty reduction.

Whereas economic development is a policy intervention aiming to improve the well-being of people, economic growth is a phenomenon of market productivity and increases in GDP; economist Amartya Sen describes economic growth as but “one aspect of the process of economic development”. Economists primarily focus on the growth aspect and the economy at large, whereas researchers of community economic development concern themselves with socioeconomic development as well.

2, Discuss the differences between Economic Growth and Economic Development
1. Economic growth measures the formal economy in very quantitative terms and in tangible results, mostly focusing on GDP and overall output.
While
Economic development focuses on intangible changes to provide qualitative results, which will in turn lead to quantitative results. Such measures taken for development include the Human Development Index (HDI), Human poverty index (HPI), gender- related index (GDI), the literacy rate of a community, life expectancy rates, infant mortality rates, and others.

2. Economic growth is not concerned with sustainability, nor does it look into depletion of natural resources which may lead to negative results for an economy, such as pollution or disease.
While
Development focuses on keeping a region sustainable and will look into symptoms of depleted resources, trying to course correct when able.

3. Economic growth does not take into account elements of morality. Undocumented economic activity from things such as black markets is not factored into growth.
While
Economic development does not actively work to thwart the informal economy, the activities implemented by development (including development of quality of life and decreasing figures of inequality) tend to increase the formal economy enough so that the informal economy can lessen its influence.

Onyekachi chidinma evangelyn
Unn/j21/socs/018

Answer No 1
Economic growth means an increase in real national income and national output.

economic development is a programs, policies or activities that seek to improve the economic well-being and quality of life for a community.what economic development means to you will depends on the community you live in. each community has its own opportunities, challenges and priority.

Answer No2
Economic growth.
1. Increase in real GDP
2. Higher national income and output
3.it focuses on production of goods and services
4. Increase in amount of goods and service
5. Subset of economic development
6. Single dimensional in nature

Economic development
1. Economic growth plus increase in living standard.
2. It focuses on distribution of resources
3. Improved healthcare
4. Multi-dimensional in nature
5. Positive impact of economic growth

Answer No3
standard of living is the amount of goods and services available to purchase in a country. Real GDP are the capita and Gross national income per capita are the two most common ways to measure the standard of living. GDP measures all transactions within a country’s boundary, while GNI includes those who live in abroad.

1. Economic growth brings quantitative changes in the economy. Economic growth reflects the growth of national or per capita income. Economic development implies changes in income, savings and investment along with progressive changes in socio- economic structure of country (institutional and technological changes).

2. Economic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, we would expect economic growth to enable more economic development.

3. The definition of a standard of living is how well or how poorly a person or group of people live in terms of having their needs and wants met.A measurement of how well off a group of people or an individual perceive themselves to be. Standard of living takes into account the quality of housing, medical care, education, transportation, and entertainment opportunities. There is no objective, single measure of standard of living; rather, it is a value judgment made by individuals. However, to inject a degree of objectivity, sometimes annual per capita income figures are used to compare different standards of living.

1. Economic Development is programs, policies or activities that seek to improve the economic well-being and quality of life for a community.
2.Economic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.
3. Standard of living is the amount of goods and services available to purchase in a country.

1. Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of goods and services produced by an economy over time And economic development is programs, policies or activities that seek to improve the economic well-being and quality of life for a community.
2. Economic growth measures the formal economy in very quantitative terms and intangible results mostly focusing on GDP and overall output while economic development Focuses on intangible changes to provide qualitative results which will in turn lead to quantitative results.
3. It is the material well-being of the average person’s in a given population.

Name:princess Raymond Chimuanya
Unn/j21/ART/078
1). Economic growth is the increase in production of economic goods and services compared from one period of time to another.it also measures the increase in GDP and National output development reflect on social economic progress and it requires economic growth.
While
b). Economic development refers to the process which takes care of the overall health, well being & academic level of the general population of a nation improve, economic development it can be seen as the qualitative improvement of love of citizen in a country.
2ai). Economic growth is a short term process.
While
ii). Economic development is a long term process which leads to progressive change in the social economic structure of the country.
2bi). It is short income (GDP,GNP,GNI,etc).
While
2bii).it is about out come (Human Development , improved standard of living etc.) .
2ci). It is a uni-dimensional approach which deal with the increase in income or output (economic growth) of a nation.
While
2bii).it is multi- dimensional approach that looks into the income and as well as the quality of life of the nation .
3). Standard of living with in and across the country .it measures the materials welfare of citizen.standard living is the level of wealth, comfort, material goods and necessity available for certain social economic class and geographical area . it includes factors such as income,gross domestic product, national economic growth, economic and political stability etc.

Question 1: Economic growth refers to an increase in the production of economy goods and services compared from one period of time to another. It’s(economic growth) measured in terms of GNP or GDP. Increase in capital goods, labour force, technology and human capital can contribute to economic growth. While Economic development is a more broader concept than economic growth, economic development refers to the process by which the overall health, wellbeing and academic level of the general population of a nation improves. According to to Amartya Sen 2001, “development is about creating freedom for people and renewing sources of unfreedom and obstacles to greater freedom”.
Question 2: Economic growth deals with an increase in the level of output while Economic development is related to an increase in output coupled with improvement in the social institutional and political welfare of the people within a country. Economic growth is a uni-dimensional approach which desls with the increase in income or output of the nation, it’s (economic growth) is a short term process. While Economic development is multi-dimesional approach that looks into the income and as well as the quality of life of the nation, it’s also a long process which leads to progressive changes in the socio- economic structure of a country. Economic growth is about income (GDP,GNP) while Economic development is about output(human development indicator (HDR), improved standard of living).
Question 3: Standard of living is the level of wealth comfort, material goods and necessities available to a certain socio-economic class or certain geographical area. The standard of living includes factors such as income, political and religious freedom, economic and political stability, environmental quality, good health care etc. The standard of living is often used to compare geographical area, it can also be used to compare distinct point in time.

1. CONCEPTS OF ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT
INTRODUCTION
Economics is all about making smart choices to cope with scarcity. The most fundamental measurement used to evaluate the success in allocating the scarce resources is economic growth. Individuals monitor their income and the changing value of their assets. Businesses track their profits and their market share. Nations monitor a variety of statistics to measure economic growth such as national income, productivity etc. Moving beyond growth and productivity, some economists argue that any assessment of the nation’s economy must also include measurements of distribution, equity, per-capita income etc. Further, the country should also focus on other needs of a society, like environmental justice or cultural preservation to sustain the economic growth process and allows an overall human development in the economy through creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment.
ECONOMIC GROWTH
The term economic growth is defined as the process whereby the country’s real national and per capita income increases over a long period of time.
This definition of economic growth consists of the following features of economic growth:
 Economic Growth implies a process of increase in National Income and Per-Capita Income. The increase in Per-Capita income is the better measure of Economic Growth since it reflects increase in the improvement of living standards of masses.
 Economic Growth is measured by increase in real National Income and not just the increase in money income or the nominal national income. In other words the increase should be in terms of increase of output of goods and services, and not due to a mere increase in the market prices of existing goods.
 Increase in Real Income should be Over a Long Period: The increase of real national income and per-capita income should be sustained over a long period of time. The short-run seasonal or temporary increases in income should not be confused with economic growth.
 Increase in income should be based on Increase in Productive Capacity: Increase in Income can be sustained only when this increase results from some durable increase in productive capacity of the economy like modernization or use of new technology in production, strengthening of infrastructure like transport network, improved electricity generation etc.
3.2 ECONOMIC DEVELOPMENT
Economic development is defined as a sustained improvement in material well being of society. Economic development is a wider concept than economic growth. Apart from growth of national income, it includes changes – social, cultural, political as well as economic which contribute to material progress. It contains changes in resource supplies, in the rate of capital formation, in size and composition of population, in technology, skills and efficiency, in institutional and organizational set-up. These changes fulfill the wider objectives of ensuring more equitable income distribution, greater employment and poverty alleviation. In short, economic development is a process consisting of a long chain of inter- related changes in fundamental factors of supply and in the structure of demand, leading to a rise in the net national product of a country in the long run.
The economic growth is a narrow term. It involves increase in output in quantitative terms but economic development includes changes in qualitative terms such as social attitudes and customs along with quantitative growth of output or national income.
2. THE DIFFERENCE BETWEEN ECONOMIC GROWTH AND ECONOMIC DEVELOPMENT
Economic growth
 Economic Growth is the positive change in the indicators of economy.
 Economic Growth refers to the increment in amount of goods and services produced by an economy.
 Economic growth means an increase in real national income / national output.
 It refers to an increase over time in a country’s real output of goods and services (GNP) or real output per capita income.
 Economic growth is single dimensional in nature as it only focuses on income of the people.
 Earlier, economic growth was only measured in terms of Gross Domestic Product (GDP).
 At present, it is measured in terms of GDP, Gross National Income (GNI) and Per Capita Income.
 Economic Growth is the precursor and prerequisite for economic development.
 Indicators of economic growth are GDP, GNI and per capita income.
 Economic growth relates a gradual increase in one of the components of GDP; consumption, government spending, investment or net exports.
 It is also considered as a traditional measure of development which indicates the quantitative rise of economy.
 Economic growth only looks at the quantitative aspect. It brings quantitative changes in the economy.
 Economic growth is concerned with increase in economy’s output.
 It focuses on production of goods and services.
 Economic growth is more relevant metric for assessing progress in developed countries.
 Economic growth is relatively narrow concept as compared to economic development.
 It is for short term/short period.
 It is a material/physical concept.
 Economic growth is measured in certain time frame/period.

Economic development
 Economic development is the quantitative and qualitative change in an economy.
 Economic development refers to the reduction and elimination of poverty, unemployment and inequality with the context of growing economy.
 Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.
 Economic development includes process and policies by which a country improves the social, economic and political well-being of its people.
 Economic development is multi-dimensional in nature as it focuses on both income and improvement of living standards of the people.
 Economic development is concerned with the happiness of public life.
 Economic development comes after economic growth. It is a positive impact of economic growth.
 Economic development also refers to:
 provision of sufficient and effective physical and social infrastructures
 equal access to resources
 participation of all in economic activities
 equitable distribution of dividends of economy.
 Economic development= Economic growth + standard of living
 It refers to increase in productivity.
 Indicators of economic development are:
 Human Development Index (HDI)
 Human Poverty Index (HPI)
 Gini Coefficient
 Gender Development Index (GDI)
 Balance of trade
 Physical Quality of Life Index (PQLI)
 Economic development is the ends of development.
 Achieving economic development is linked with end of poverty and inequality.
 It is more abstract concept.
 Economic development focuses on distribution of resources

3. STANDARD OF LIVING WITHIN AND ACROSS A NATION
Definition
The standard of living is a term used to describe the level of income, necessities, luxury, and other goods and services that are generally readily available to a designated population. It is basically a metric that evaluates the amount of material goods that are produced and sold within a specified geographic area – such as a community, province, state, or country.
Two of the most commonly used indicators of standard of living in a country are the gross domestic product (GDP) – the total production of goods and services within a calendar year – and GDP per capita. However, in its evaluation of the standard of living, the World Bank uses Gross National Income (GNI) per capita – the average per-person income that a country’s total population receives each year.
The concept of standard of living is closely related to, but considered distinct from, an evaluation of the quality of life in an area. The standard of living and quality of life are frequently evaluated using several factors considered common to both metrics.
The primary difference between the two metrics is that standard of living is a more readily quantifiable term, focused more on purely material factors, while the quality of life is typically a more subjective evaluation of how contented, satisfied, or fulfilled people feel with the nature of their lives.
Factors Used in Evaluating the Standard of Living
In addition to GDP or GDP per capita, the main factors that are usually used in any calculation of the standard of living are other readily quantifiable economic factors – such as average income, consumer spending, housing prices, the poverty rate in an area, available goods and services, the rate of inflation, and employment levels.
Other factors that may be included in examining the standard of living in an area are things such as access to medical care, educational opportunities, infrastructure, housing affordability, climate, crime rate, and the level of economic stability in the area. The relative health of the population – frequently measured using the metric of life expectancy – is also a factor considered when evaluating the standard of living.
The level of private business investment in an area can substantially improve the area’s standard of living – for example, if a major corporation such as FedEx opens a regional hub in a city that will provide numerous, well-paying jobs. Conversely, if a major retailer such as Walmart should close its store in a city, that would likely lower the standard of living due to the loss of jobs and access to goods.
Access to basic utilities is also a common consideration when measuring the standard of living. A region or country where few people with indoor plumbing or electricity experience a notably lower standard of living compared to an area where virtually all of the residents are able to access such basic necessities of life.
Factors such as environmental aspects, access to leisure and cultural activities, and political freedom may also be included in evaluating the standard of living, but such kinds of factors are more often looked at when evaluating the quality of life.
How is the standard of living measured?
Economists have historically measured a country’s standard of living by its real gross domestic product (GDP) per capita.
Let’s break this down a bit. GDP refers to the total value of all goods and services that a country produces in a set period of time, usually annually. Real GDP adjusts for inflation (i.e. the increase in the price of goods and services over time). Per capita essentially means per person.
So, in summary, the real GDP per capita seeks to measure the average economic output of each resident in a country.
Real GDP per capita can be calculated as follows:
Real GDP Per Capita = (Nominal GDP / (1 + Deflator)) / Population
Real GDP Per Capita = Real GDP / Population
The nominal GDP simply refers to GDP without factoring in inflation. The deflator – aka the change in the value of the currency between the years you’re comparing – is an economic tool used to adjust for inflation. You can typically find the deflator for a country listed online, often published by a country’s government. For example, the Bureau of Economic Analysis publishes annual deflator information for the US. Taking nominal GDP / (1 + deflator) will result in a country’s real GDP. The last step is then dividing this real GDP by population to determine the real GDP per capita.
If the real GDP per capita of a country is on the rise, then, by this definition, the standard of living of that country is also rising. It indicates that there are likely more goods and services available to consumers and that they’re in a better position to buy them. This definition of standard of living is purely material and quantifiable – It doesn’t factor in quality of life components like privacy, safety, and freedom as religion, as discussed earlier.

1. Economic growth brings quantitative changes in the economy.economic growth reflects the growth of national or per Capita income. Economic development implies changes in income, savings and investment along with progressive changes in socio- economic structure of country (institutional and technological changes).
2. Economic growth means an increase in real national income / national output.
Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care.
3. Standard of living generally refers to wealth, comfort, material goods and services, and necessities of certain classes in certain areas or more objective characteristics.
Standard of living in a country is the amount of goods and services available to purchase in a country. Real GDP per Capita are the two most common ways to measure the standard of living.