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Gdp and economy of less developed countries economics essay

UK real GDP since 1955.

Evaluate whether an increase in economic growth is beneficial?

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.

The pursuit of economic growth Essay

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.

  1. Increased Business Investment can only mean increased productivity and efficiency, so the country goods and services would become better and cheaper and in other way, more competitive.
  2. It also depends on the distribution of economic growth — who benefits from the economic growth.
  3. The diagram illustrate that, among 1950 and 1992, the amount of marketed goods and services the average American could buy almost two times.
  4. Therefore, growth can cause a virtuous cycle of higher investment leading to higher growth — which enables more investment.

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.

Benefits of economic growth

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.

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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.