The most reliable and acceptable index of economic growth is the__________

1. Analyze the question The question asks which measure is the most reliable and widely accepted indicator of economic growth, meaning the increase in a country's output of goods and services over time.

2. Explain the concept Economic growth is the rise in the total value of goods and services an economy produces. It is measured by tracking national income (GDP, GNP or NNP) over time, usually adjusted for inflation (real national income) and often expressed per capita.

Price indices, on the other hand, measure changes in price levels (inflation), not output.

3. Evaluate each option

• A. Wholesale Price Index: tracks changes in the prices of goods sold in bulk. It measures inflation, not growth.
• B. Consumer Price Index (CPI): tracks changes in the prices of a basket of goods and services bought by households. It is the main measure of the cost of living and inflation, not growth.
• C. National Income: the total value of goods and services produced (and income earned) in an economy in a period. A rise in real national income over time shows growth. ✔
• D. Retailer's Price Index: another price measure, so it also reflects inflation, not output.

4. Answer The correct option is C. National Income.

5. Exam tip Remember this link: Price index → inflation; National income (GDP/GNP) → growth. If the question says "growth" or "output," think national income. If it says "cost of living" or "price changes," think CPI or other price indices.