1)The quantity demanded for a good can be greater than the quantity actually sold. Quantity demanded means the total amount of goods and services that consumers demand over a given period of time. This is the possibility that the quantity demanded for a good can be greater than the quantity actually sold. But it is not necessary that the quantity demanded must equal the quantity actually sold and is always greater than the quantity actually sold. There is no possibility of the quantity demanded for a good can be less than the quantity actually sold.

2)Economic development is defined as an increase in a country's wealth and standard of living.It is usually measured by an increase in the Gross Domestic product (GDP)or other measure of aggregate income where as Economic growth can be defined as a positive change in the level of goods and services produced by a country over a certain period of time and also can be compared between countries, although no two countries are the same.

As per professor Nurkse rightly remarks " Economic development has much to do with human endowments, social attitudes, political conditions and historical accidents. Capital is necessary but not a sufficient condition of progress".

Factors that influence economic growth include

• Growth of productivity
• Demographics
• Labour force participation
• Human capital
• Inequality
• Trade
• Quality of life and
• Employment rate

Major Factors that determine Economic growth and Development of a country:

The process of economic growth is a highly complex phenomenon and influenced by numerous and varied factors such as economic, political, social and cultural factors.

The following are various factors which determine economic growth and development :

1. Supply of Natural resources
2. Capital form action which depends upon the rate of domestic saving and investment and inflow of foreign capital.
3. Growth of population
4. Technological progress

Supply of Natural resources:

  The quantity and quality of natural resources play a vital role in the economic development of a country. Important natural resources are land, minerals and oil resources, water, forests, climate etc. The quality of natural resources available in a country puts a limit on the level of output of goods which can be obtained.

Without am minimum of natural resources there is not much hope for economic development.For instance, India though rich in natural resources, has remained poor and under-developed.This is relatively because resources have not been fully utilised for productive purposes. Is is not only the availability of natural resources but also the ability to bring them into use which determines the growth of an economy. On the other hand, japan has a relatively few natural resources but has show a very high rate of economic growth and as a result has become one of the richest countries in the world.

Capital Formation:

Labour is combined with capital to produce goods and services, workers need machines, tools and factories to work. Levels of productivity in the USA are very high mainly becuase American people work with more and better type of capital goods built up over the last several years. Low productivity and poverty of developing countries is largely due to the scarcity or shortage of real physical capital in these countries. Economic growth cannot be speeded up without accumulating various types of capital goods

These may include

• Foreign capital- Foreign Aid and foreign Investment and
• Human capital - Education and Health

Growth of population"

The growth of population is another factor which determines the rate of economic growth and increases the level of output by increasing the number of working population or labour force provided.Labour is combined with capital to produce goods and services, therefore, increase in the quantity of labour force will contribute to economic growth when the cooperating factor capital is also increasing

we thus see that a rapidly growing labour force by itself is no guarantee of economic growth, that is possible only when the supplies of capital and other resources are increasing adequately along with the growth of labour force. In other hand, when the supplies of capital and the other resources are meagre, the increase in the labour force or population will merely add to unemployment and will not bring about increase in national output.

Technological progress:

Another important factor in economic growth is progress in technology, Use of advanced techniques in production brings about a significant increase in per capita output. Technological advance refers to the discovery of new and better ways of doing things in the old ways.

Sometimes technological advances result in an increase in available supplies of natural resources. As a result of technological advance it become possible to produce more output with same resources or the smaze amount of product with mess resource. Also the technological progress may express itself in making available of new products. It is now widely accepted that change raises productivity and that continuous will enable the economy to escape from being driven to the stationary state or economic stagnation.

Classical economists like Ricardo and J.S.Mill expressed fear that the increase in the stock of capital will sooner or later, because of the operation of diminishing returns. As per Prof. Rostow Proposed 5 stages in the development of an economy.

• Traditional society
• Preconditions for takeoff
• Take-off into self-sustaining growth
• Drive to maturity and
• Stage of high mass consumption

Example: As per Harrod- Domar Growth equation:

We have analysed above the various factors such as availability of natural resources, rate of saving and capital information, foreign capital, technological progress, growth of population etc... These determinants of economic growth affect

1.the rate of investment and

2.per capita output ratio

According to them, economic growth is given by the following formula.

g=I/v

where g stands for rate of growth (rate of increase in GNP)

I stands for rate of investment and

v for capital-output ratio.