evaluate the benefits of growth
Evaluate the benefits of growth
Growth is commonly defined as an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms or real terms. The growth of an economy is thought of not only as an increase in productive capacity but also as an improvement in the equality of life to the people of that economy. The causes of such economic growth are usually an increase in aggregate demand as well as an increase in aggregate supply or productive capacity (the maximum output that the economy can produce). Advantages such as higher employment levels, improved living standards, confidence and an improved fiscal position accompany an economy that is growing.
Governments tend to try to achieve economic growth as it has the benefit of a lower unemployment rate. More people that are willing to work will most likely have a job therefore they will earn income. In turn, this will lead to the GPD of that country inevitably increasing. If an employment rate and stable and sustainable, economic growth will occur. With higher outputs firms tend to employ more workers thus creating more jobs. Employed workers are a factor of production known as the labour force. If there is unemployment, this indicates that the factors of production are not being used efficiently so the point on the production possibility frontier will not be on the frontier itself. Higher employment levels may also lead to higher incomes which will enable consumers to enjoy more goods and services thus having a better standard of living. Also affected by this is the consumer and business confidence, economic growth has a positive impact on business profits and confidence as a stronger economy will encourage consumers to carry out major purchases. This reason is a good depiction of the increase in real GDP reflecting an increase in the value of national expenditure. Furthermore, sustained GDP growth boosts tax
Growth is commonly defined as an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic growth can be measured in nominal terms or real terms. The growth of an economy is thought of not only as an increase in productive capacity but also as an improvement in the equality of life to the people of that economy. The causes of such economic growth are usually an increase in aggregate demand as well as an increase in aggregate supply or productive capacity (the maximum output that the economy can produce). Advantages such as higher employment levels, improved living standards, confidence and an improved fiscal position accompany an economy that is growing.
Governments tend to try to achieve economic growth as it has the benefit of a lower unemployment rate. More people that are willing to work will most likely have a job therefore they will earn income. In turn, this will lead to the GPD of that country inevitably increasing. If an employment rate and stable and sustainable, economic growth will occur. With higher outputs firms tend to employ more workers thus creating more jobs. Employed workers are a factor of production known as the labour force. If there is unemployment, this indicates that the factors of production are not being used efficiently so the point on the production possibility frontier will not be on the frontier itself. Higher employment levels may also lead to higher incomes which will enable consumers to enjoy more goods and services thus having a better standard of living. Also affected by this is the consumer and business confidence, economic growth has a positive impact on business profits and confidence as a stronger economy will encourage consumers to carry out major purchases. This reason is a good depiction of the increase in real GDP reflecting an increase in the value of national expenditure. Furthermore, sustained GDP growth boosts tax