Increase in absolute and per capita real GNP do not connote a higher level of economic development, if

1. A

   industrial output fails to keep pace with agricultural output.

   (a) Industrial output failing to keep pace with agriculture. Sectoral imbalance is a structure issue, not the textbook reason that real GNP growth may not mean development. This is not the key.

2. B

   agricultural output fails to keep pace with industrial output.

   (b) Agriculture failing to keep pace with industry. Again a composition point, not the welfare test in the question. This is not the key.

3. C

   poverty and unemployment increase.

   (c) Poverty and unemployment increase. (c) Official key: Economic development is a rise in living standards and capabilities, not GNP alone. If absolute and per capita real GNP rise while poverty and unemployment worsen, development has not occurred. That is the stored key.

4. D

   imports grow faster than exports.

   (d) Imports growing faster than exports. A trade gap may be a concern, but it does not by itself deny development when GNP rises. This is not the key.

Summary. Official key is (c). Development requires improvement in poverty, employment and human welfare, not only higher real GNP. Industrial–agricultural ratios and import–export gaps are different diagnostics. Honour the stored letter (c).