A country having skilled and educated workforce with rich natural resources takes the economy on the growth path.The best examples of such economies are developed countries, such as United States, United Kingdom, Germany, and France. Sustained economic growth of a country’ has a positive impact on the national income and level of employment, which further results in higher living standards.Apart from this, it plays a vital role in stimulating government finances by enhancing tax revenues.
Lower interest rates would make borrowing cheaper and should encourage firms to invest and consumers to spend. Countries having plenty of natural resources enjoy good growth than countries with small amount of natural resources.The efficient utilization or exploitation of natural resources depends on the skills and abilities of human resource, technology used and availability of funds.
Natural resources involve resources that are produced by nature either on the land or beneath the land. Countries that have worked in the field of technological development grow rapidly as compared to countries that have less focus on technological development. For example, in 2005-2006, the rate of increase in India’s GNP was 9.1%, while its population growth rate was 1.7%.In such a case, per capita increase in GNP would be 7.4% (=9.1-1.7). On the other hand, if the rate of increase in GNP and population is same then the actual growth of GNP would be zero, which implies that there is a decrease in per capita income.As a result, there would be no economic growth.
Apart from this, political factors, such as participation of government in formulating and implementing various policies, have a major part in economic growth.Welcome to EconomicsDiscussion.net! Because Keynesian economists believe the primary factor driving economic activity and short-term fluctuations is the demand … This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU.
In theory, this increases the standard of living for the people of a country, leading to economic growth. This enables the government to earn extra income for the further development of an economy. There are many things which contribute to short term growth, which are not sustainable. Generally, the economic growth of a country is adversely affected when there is a sharp rise in the prices of goods and services.Refers to one of the most important determinant of economic growth of a country. Click the OK button, to accept cookies on this website.
The economy is made up of two activities: moving things and transforming things.
The resources on land include plants, water resources and landscape.The resources beneath the land or underground resources include oil, natural gas, metals, non-metals, and minerals.
Capital formation increases the availability of capital per worker, which further increases capital/labor ratio. High sustained oil prices, and high global demand for oil will constrain economic growth. The selection of right technology also plays an role for the growth of an economy.
Social factors involve customs, traditions, values and beliefs, which contribute to the growth of an economy to a considerable extent.For example, a society with conventional beliefs and superstitions resists the adoption of modern ways of living. Consequently, the productivity of labor increases, which ultimately results in the increase in output and growth of the economy.Refers to one of the important factors that affect the growth of an economy. Economic growth - Economic growth - Demand and supply: Much contemporary growth theory can be viewed as an attempt to develop a theoretical model that would bring the rate of growth of demand and the rate of growth of supply into line, since a model implying that capitalist systems are inherently unstable would not correspond to the historical facts. An important characteristic of economic growth is that it is never uniform or same in all sectors of an economy For example, in a particular year, the telecommunication sector of a country has marked a significant contribution in economic growth whereas the mining sector has not performed well as far as the economic growth of the country- is concerned.Economic growth is directly related to percentage increase in GNP of a country. There are several factors affecting economic growth, but it is helpful to split them up into:Therefore a rise in Consumption, Investment, Government spending or exports can lead to higher AD and higher economic growth.In the long run, economic growth is determined by factors which influence the growth of Long Run Aggregate Supply (LRAS).
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which is a demand factor in economic growth?