The impact of economic growth and the importance of economic growth Essay:
UK real GDP since Shows the magnitude of increased national output. The benefits of economic growth include: This enables consumers to enjoy more goods and services and enjoy better standards of living. Economic growth during the Twentieth Century was a major factor in reducing absolute levels of poverty and enabling a rise in life expectancy.
With higher output and positive economic growth, firms tend to employ more workers creating more employment. UK unemployment rises during a recession — falls during periods of economic growth.
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. With increased tax revenues the government can spend more on public services, such as the NHS and education e. Money can be spent on protecting the environment.
With higher real GDP a society can devote more resources to promoting recycling and the use of renewable resources Investment.
Economic growth encourages firms to invest, in order to meet future demand. Increased research and development. High economic growth leads to increased profitability for firms, enabling more spending on research and development. Also, sustained economic growth increases confidence and encourages firms to take risks and innovate.
Evaluation of economic growth For developing economies in Sub-Saharan Africa, economic growth enables countries to escape the worst levels of poverty.
Even a small level of economic growth can facilitate higher living standards and an improvement in life expectancy. In the developed world, economic growth is less essential.
It depends on the nature of economic growth. For example, if economic growth leads to more pollution and congestion, then living standards may not seem to hit. It also depends on the distribution of economic growth — who benefits from the economic growth. If growth benefits primarily the richest in society, growth may do little to overcome poverty Related.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. 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 . 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 GDP ratio. This essay will highlight the main causes, advantages and disadvantages of economic growth and consider various alternative measurements of economic growth which associated with the standard of living.
Causes of Economic Growth. Technological Progress. Economic growth happened because of a few factors, one of them is the . Economic growth comes as a result of the use of a countries available resources and the factors in their production.
These factors can directly or indirectly affect the levels of economic growth. Economic growth will lead to a increase in the prosperity in the developed, underdeveloped, and emerging countries. Main Benefits of Economic Growth. Higher living standards – i.e.
Real GNI per capita – helps to lift people out of extreme poverty and improve development outcomes (e.g. rising HDI) Employment effects – sustained growth stimulates jobs and contributes to lower unemployment rates which is turn helps to reduce income inequality.