Economic growth encourages firms to invest, in order to meet future demand. What is more, many of the environmental costs are likely to be underestimated due to lack of scientific knowledge. However, if growth is increased by increasing the productive capacity and increasing the long run trend rate then inflation will not occur and the growth will be sustainable.
Governments often try to increase the growth rate because it will have various advantages. With higher output and positive economic growth, firms tend to employ more workers creating more employment.
The benefits Advantages of economic growth essay economic growth include: Economic growth also plays a role in reducing debt to GDP ratios. Without a continuing rise in national income, the scope for helping the poor is much more limited.
In conclusion, economic growth can have both benefits and costs depending on certain factors. However, higher economic growth may encourage governments and consumers to spend more of their disposable income on protecting the environment.
However, rather than trying to stop economic growth, it is better to concentrate on improving the nature of economic growth. This enables consumers to enjoy more goods and services and enjoy better standards of living.
However economic growth has various costs. Either way, there must be a cut in consumption. With increased tax revenues the government can spend more on public services, such as the NHS and education e. Moreover it is desirable as long as the benefits outweigh the costs.
Acid rain and the depletion of the ozone layer have been 2 examples. If growth involves using a greater amount of resources, rather than using the same amount of resources more efficiently, certain non-renewable resources will run out more rapidly.
The finance can come from higher saving, higher retained profits or higher taxes. In the developed world, economic growth is less essential.
Their jobs may be replaced by machines. Also, growth will lead to the consumption of non-renewable resources which may place costs on future generations. There will also be expansion of demand, leading to increased output.
Does it harm the environment? Also, sustained economic growth increases confidence and encourages firms to take risks and innovate. With higher GDP the government will be able to collect more taxes; this is because people as incomes rise and people spend more they will pay more income tax and VAT.
If growth benefits primarily the richest in society, growth may do little to overcome poverty Related. Higher economic growth will also lead to an increase in demand for labour as firms will be producing more.
These include Firstly, higher GDP implies the economy is producing more goods and services and therefore consumers can enjoy more goods and services. This can lead to higher levels of consumption of goods and services. For example, better infrastructure enables lower cost of trade. This will require financing.
Economic growth often leads to increased inequality because growth benefits the richer most because they own assets and have the best-paid jobs. If human welfare is linked to consumption then growth will benefit society.
Growth in productive potential helps to meet these aspirations and avoid macroeconomic crises. Next, growth involves changes in production: If incomes rise, the government can redistribute incomes from the rich to the poor without the rich losing.
If the economy is in recession, then increasing the rate of economic growth will be an important step in reducing unemployment. Shows the magnitude of increased national output. The poorest countries often have bad pollution because they cannot afford to reduce it.Economic growth creates higher tax revenues, and there is less need to spend money on benefits such as unemployment benefit.
Therefore economic growth helps to reduce government borrowing. Economic growth also plays a role in reducing debt to GDP ratios. A long period of economic growth in the post-war period helped reduce the UK debt to.
“Discuss the benefits of high economic growth” Economic growth refers to the increase in productive capacity of an economy. It can be shown with an outward shift in the production possibility curve or an outward shift in the aggregate supply curve.
Economic growth is an increase in real GDP for a country over a given time. Advantages of Economic Growth.
Standard of living of the people will increase Economy growth is an important point to bring better living standards and lower rates of poverty. Benefits and Costs of Economic Growth Economic growth is defined as the sustained increase in real GDP or GNP per capita over time. Economic growth is desirable for an economy as it increases its real national income and.
If the economy is in recession, then increasing the rate of economic growth will be an important step in reducing unemployment. The rise in unemployment in /09 was due to negative economic growth. ECONOMIC GROWTH Introduction Economic growth is the measure of how an economy’s production increases when one period is compared with a previous one.
Most economists argue that the advantages of economic growth outweigh the disadvantages.Download