Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
- industrial output fails to keep pace with agricultural output.
- agricultural output fails to keep pace with industrial output.
- poverty and unemployment increase.
- imports grow faster than exports.
Per capita GNP is the total value of all the goods and services produced by a country in a year including income from foreign investments, divided by the number of people living there.
For countries which have a lot of foreign investments, GNP per capita is a more accurate economic indicator.
GNP = GDP + Net income inflow from abroad – Net income outflow to foreign countries.
Therefore, if gains of increase in per capita income are grabbed by a small section of society, then economic growth will not lead to economic development.
The correct option is C.