Consider the following changes in a country, other things remaining the same:
(A) A new steel plant adds to the country’s stock of productive capital.
(B) More banks and transport services are set up to support production.
(C) Existing machines are used more efficiently and give more output.
(D) The prices of goods rise while the quantity of goods produced stays the same.
(E) Transport services are better organised, so goods reach factories faster and more is produced.
As per the meaning of growth as a goal of the five year plans, how many of the above changes are examples of growth?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Four
Growth is a rise in the country’s capacity to produce goods and services. It comes from more productive capital, more supporting services such as transport and banking, or more efficiency.
(A) A new steel plant adds to the country’s stock of productive capital. — Correct. A larger stock of productive capital.
(B) More banks and transport services are set up to support production. — Correct. A larger size of supporting services.
(C) Existing machines are used more efficiently and give more output. — Correct. Greater efficiency of productive capital.
(D) The prices of goods rise while the quantity of goods produced stays the same. — Incorrect. Only prices rise. The output does not grow, so capacity has not risen.
(E) Transport services are better organised, so goods reach factories faster and more is produced. — Correct. Greater efficiency of supporting services.
So (A), (B), (C) and (E) are examples of growth: four.
NCERT (2026-27): “2.2 The Goals of Five Year Plans … Growth: It refers to increase in the country’s capacity to produce the output of goods and services within the country. It implies either a larger stock of productive capital, or a larger size of supporting services like transport and banking, or an increase in the efficiency of productive capital and services. A good indicator of economic growth, in the language of economics, is steady increase in the Gross Domestic Product (GDP). …” |