Which of the following activities will not lead to economic growth?

1. Analyze the question We need the activity that does not promote economic growth. Economic growth means a sustained increase in a country's output of goods and services (real GDP) over time.

2. Explain the concept Growth depends on expanding the productive capacity of the economy. The main drivers are:

• Capital formation (factories, machines, infrastructure)
• Technological progress
• Improvements in labour skills and size
• Efficient use of natural resources

Anything that adds to productive capacity helps growth. Anything that only adds to consumption, without building capacity, does not.

3. Step-by-step evaluation

• A. Massive importation of capital goods: Capital goods (machinery, equipment) are used to produce other goods. Importing them raises productive capacity, so this leads to growth.
• B. Intensive capital formation: Building up capital stock raises output potential, so this leads to growth.
• C. Use of modern technology: Technology raises productivity and efficiency, so this leads to growth.
• D. Massive importation of consumer goods: These goods are consumed directly and do not expand production capacity. They also drain foreign exchange, worsen the balance of payments, and can hurt local industries by competing with them. This does not lead to growth.

4. Answer The correct option is D. Massive importation of consumer goods.

5. Exam tip Remember the contrast: capital goods build, consumer goods consume. When a question asks what will not promote growth, look for the option that increases consumption or spending abroad rather than production at home.