10.+Explain+how+and+why+economists+are+attempting+to+find+ways+of+measuring+economic+‘development’+as+distinct+from+‘growth’.

10. Explain how and why economists are attempting to find ways of measuring economic ‘development’ as distinct from ‘growth’.
Economic growth is most often measured by changes in real Gross Domestic Product (GDP) over a period of time. On the other hand, Economic development occurs when there has been an increase in the standard of living across a broad section of the population. As GDP represents the total value of goods and services produced in an economy, and not the actual standard of living, a very large GDP does not necessarily mean that the standard of living will also be high. For example, India is considered to be a less developed country when it's GDP is 4 times larger than Norway, the country considered to have the highest standard of living.

As a result, economists have developed different factors to measure economic development. The most widely accepted measure today is the Human Development Index (HDI). The HDI consists of three primary factors: Literacy rate (education), GDP per capita (GDP divided by population) and Life expectancy. It combines all three factors and allocates a number between 0 and 1 for each country - the closer to 1, the higher the standard of living. Using GDP per capita is particularly more beneficial than just GDP as it gives an average estimate of how much income each person in a country receives. As is the case with India, a country might have a very large GDP, but if it has to be divided by an extremely large population the average person will not have a high income. However, it is not a completely accurate measure either as GDP per capita does not account for income distribution (how evenly income is spread throughout a population) within a country. Hence, there could be a high GDP per capita but still a considerably large number of poor people in a country.