An increase in a country's production capacity usually leads to economic

1. Analyze the question The question asks what an increase in a country's production capacity (its ability to produce goods and services) usually leads to.

2. Explain the concept

• Economic growth is a sustained increase in a country's output of goods and services (real GDP). It is usually caused by an increase in productive capacity, which comes from more resources, better technology, more capital, or a larger labour force. On a PPF (Production Possibilities Frontier), it is shown by the curve shifting outward.
• Economic development is broader. It covers growth plus improvements in living standards, such as health, education, income distribution, and reduced poverty.
• Economic stability means steady prices, low inflation, and steady employment, with no wild fluctuations.
• Economic efficiency means using resources in the best way, with minimal waste.

3. Solution

• An increase in production capacity means the economy can produce more output, which is the definition of economic growth.
• Development (A) needs more than increased output, because quality-of-life indicators must also improve.
• Stability (B) concerns price and income fluctuations, not capacity.
• Efficiency (D) concerns how well resources are used, not how much can be produced.

4. Answer The correct option is C. growth.

5. Exam tip Remember: Growth = more output (quantity), Development = better living standards (quality). If a question mentions "production capacity," "output," "GDP," or "outward shift of the PPF," think growth.