Robyn Mathews AS Economics
Discuss the extent to which economic
growth may benefit an economy.
7)Economic growth will benefit an
economy to an extent. Economic growth will result in an increase in the output
of goods and services, raise tax revenue, may lower unemployment and so reduce government
spending on unemployment related benefits.
However economic gwoth may not benefit
an economy as there may be disadvantages of economic growth including an
opportunity cost in the short run, pollution, depletion of non-renewable
resources and stress the consequences of economic growth will depend on the
nature of the growth, how it is achieved and how the benefits are distributed.
The effects of economic growth will
be influenced by the type of extra products produced. For example, if more
consumer goods and services are made, living standards will rise now. If more capital
goods are made, it may take a little while for living standards to increase. If
more weapons are made, people may not feel better off For living standards to rise, real GDP has to
increase by more than population, so real GDP per head increases If income is
unevenly distributed, only a small proportion of the population may benefit for
economic growth. The more sustainable economic growth is, the more beneficial
it is likely to be.
Avoiding depleting non-renewable
resources and pollution, is more likely to enable economic growth to continue for
future generations. Outcome will depend on the nature of economic growth i.e. whether
it is short or long run. Economic growth
resulting from a shift of the aggregate demand curve to the right may be associated
with inflation whilst potential economic growth resulting from a shift to the
right of the aggregate supply curve may reduce inflationary pressure Economic
growth caused by shifts of both the AD and AS curves will last for longer than
economic growth resulting from just a shift in one curve.
Economic growth may have both costs and
benefits for economic growth to be beneficial the benefits must outweigh the costs.
As economic growth is a macro economic objective for most governments this
suggests most countries regard economic growth as beneficial.c
Very good writing Robyn but its on the wrong blog!
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