What is the difference between economic efficiency and economic growth?

Economics Supply And Demand Questions



80 Short 55 Medium 47 Long Answer Questions Question Index

What is the difference between economic efficiency and economic growth?

Economic efficiency refers to the optimal allocation of resources to maximize production and minimize waste. It focuses on producing goods and services in the most efficient manner possible, ensuring that resources are used effectively to meet consumer demands.

On the other hand, economic growth refers to an increase in the overall production and consumption of goods and services in an economy over a period of time. It is measured by the increase in the real gross domestic product (GDP) and is often associated with improvements in living standards and higher levels of employment.

In summary, economic efficiency is concerned with using resources efficiently, while economic growth focuses on the expansion of the overall economy.