Detailed Explanation:

Answer: Option 3 — poverty and unemployment increase.

Economic growth (increase in GNP) does not automatically translate to economic development if the benefits are not equitably distributed. When poverty and unemployment increase despite rising GNP, it indicates that growth is concentrated among a few, failing to improve the living standards of the broader population. True economic development requires inclusive growth that reduces poverty, creates employment, and enhances overall welfare.

📝 Short Notes: Economic Growth vs Economic Development

• Economic Growth: Refers to the quantitative increase in the production of goods and services, measured by indicators like GNP, GDP, and per capita income.
• Economic Development: A qualitative concept that includes economic growth plus improvements in living standards, reduction in poverty and inequality, better health and education, and sustainable resource use.
• Key Difference: Growth is a necessary but not sufficient condition for development. Development implies structural transformation and equitable distribution of resources.
• Inclusive Growth: Economic development requires that the benefits of growth reach all sections of society, particularly the poor and marginalized.
• Development Indicators: HDI (Human Development Index), poverty ratio, unemployment rate, literacy rate, life expectancy, and infant mortality rate are better measures of development than just GNP.
• Policy Implication: Governments must focus on employment generation, social welfare programs, education, and healthcare to convert growth into development.