Economic growth is primarily driven by factors that increase an economy's productive capacity. Investment, particularly in physical capital (machinery, infrastructure) and human capital (education, skills), is a key driver of long-term economic growth. It leads to capital accumulation, technological adoption, and increased productivity. While consumption contributes to aggregate demand, and price stability creates a favourable environment, they are not the fundamental drivers of the growth capacity itself in the same way investment is. Population growth can increase the labour force, but without corresponding investment and technological progress, it may not lead to increased per capita income or sustainable growth.
Economic growth is dependent mainly on
Asked in APSC CCE Prelims Exam 2006 · Topic: National Income & Gross Domestic Product (Factors Determining National Income and Economic Growth)
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Answer: C. level of investment
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