Final answer:
An increase in an economy's GDP usually means that both income and the market value of all production rise. However, not all increases in GDP are indicative of positive changes in an economy. It's also worth considering how population growth affects GDP per capita and individual economic conditions. The correct choice is income and the market value of all production both rise.
Step-by-step explanation:
If an economy's Gross Domestic Product (GDP) rises, it is generally an indication that the economy's income and the market value of all production both rise. This is because GDP measures the value of goods and services produced in an economy over a specific period, and it is expressed in dollar terms.
An increase in GDP represents an increase in economic activity. It also means firms are generating more income which then flows to households and others in the form of wages, salaries, and dividends. However, it is worth noting that not all GDP increases are indicative of positive economic developments. For instance, GDP may increase due to increased spending on security or reconstruction after a disaster, which may not necessarily reflect an improved standard of living.
Despite the increase in GDP, it is also important to consider the impact of population growth. If the population grows faster than GDP, this would cause GDP per capita to decrease, which might not indicate an improvement in the standard of living. Conversely, if population growth is slower than GDP growth, the GDP per capita increases, suggesting improving economic conditions for the individuals in the economy.
In terms of personal income and saving, a rise in GDP would typically lead to an increase in personal income as a proportion of that GDP finds its way to individuals. Part of this income could be saved, leading to an increase in savings. The relationship between GDP and imports is such that as GDP increases, consumers tend to have more income to spend, potentially leading to a rise in imports if those consumers are buying goods and services produced in other nations.