Search
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

# Country's economy - Case Study Example

Summary
The long-run rate of economic growth measures the ability of a nation to progress its living standard. It is believed that even a small change in the long-run growth rate over a period of time will lead to a big advance in the income of an average person. …

## Extract of sampleCountry's economy

Download file to see previous pages... The Figure below shows the economic growth in eight major countries from 1870 to 1996. In 1870, Australia was the richest economy whereas Japan was the poorest economy of the sixteen major economies of that time. In the same year, Australia’s real GDP per capita was almost five times that of Japan. Over the following 126 years, Australia’s economy grew by 1.3% which allowed real GDP per capita to increase by 5 times. However, during the same time, Japan’s economy grew by 2.7% which allowed its real GDP per capita to advance by 28 times. Likewise, Figure 11 also shows the progress made by United States from 1870 to 1996. The long-run rate of economic growth of the American economy was 1.7% which allowed it to raise its living standards by 8 times in 126 years. Therefore, the long-run rate of economic growth is an important measure of the nation’s wealth. (Bernanke, 2003) Figure 1: Economic Growth in Eight Major Countries The output of the economy depends upon the quality and quantity of labor and capital and on their productivity. If the inputs are constant, there is no economic growth in the country. Therefore, one of the inputs has to change along with the productivity for a healthier growth rate. The relationship between inputs and outputs of the economy are reflected in the following equation; which also shows the important factors that affect the long-run rate of economic growth. (Bernanke, 2003) Y= AF (K, N) Where: Y = Output of the economy A = Productivity N = Labor K = Capital Requirements Labor Labor refers to the working force of the nation-be it skilled, semi skilled or unskilled. Labor is one of the most important inputs into the economy. A skilled, educated labor force makes a strong contribution to the other factors of the economy. Along with them, the economy also requires semi-skilled and unskilled labor. However, the most important thing is their constant supply to the market. Similarly, the skills acquire must match the demand of the economy. (Bernanke, 2003) Technological Progress Technological progress refers to the ability of the nation to adapt to update infrastructure and equipments. No country can expect to progress without the necessary infrastructure for specific technology. In our globalized world, the economy needs to incorporate up-to-date technology replacing the obsolete machines to match the increasing demands. The smooth flow with the technological progress allows making the necessary progress. (Bernanke, 2003) Investment Investment refers to the capital requirements of the growing economy. The country needs consistent investment to make remarkable progress and achieve long-run rate of economic growth. Therefore, the nation needs to establish an environment that allows the continuous flow of foreign direct investment into the country and a credit history that allows it to raise the debt when needed. However, there needs to be sustainable amount of debt so that it does not hamper the growth in the long run. (Bernanke, 2003) Productivity It is another important factor for consistent long-run growth rate. This component refers to increase in the efficiency and effectiveness of the same labor and capital inputs. Therefore, if the productivity of the nation increases keeping the labor and capital same, the economy will growth by a certain factor. (Bernanke, 2003) Answer 2 Gross Domestic Output (GDP) is defined as market value of all the goods and services produced by a particular nation within the domestic boundaries. (Amadea, 2011) There are four components of the GDP as shown in the following equation: Y = C + I + G + X Where Y = Total output C = Personal consumption expenditures I = Investment G = Government spending X = ...Download file to see next pagesRead More
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Reasons Why Free Trade Has a Negative Impact on a Country's Economy
Reasons Why Free Trade Has a Negative Impact on a Country's Economy When the United States agreed to join the ranks of the Free Trade nations, it did so with the high hopes of being able to freely exchange intellectual copyrights,exchanging goods with other nations, lowering tariffs, lowering the cost of manufacture for in demand goods, and being able to sell these items on the open market at reasonable and affordable prices.
6 Pages(1500 words)Research Paper
Economic in Society
The issues are not just limited to the supply and demand of major medicines but quite surprisingly, many of the south-east Asian countries follow unethical practices, such as buying of drugs without proper prescription from the doctor and people buying them at their own knowledge as they might just be use to of using the similar medicine again and again.
7 Pages(1750 words)Case Study
The feasibility of producing frozen foods for export in Thailand
Respondents will be required to state whether they would purchase frozen foods from Thailand if brought into their local market. The second approach will involve the use of secondary materials. It will entail an analysis of the export potential in Thailand through assessment of its trade tariffs, economic growth, economic polices and raw material availability.
8 Pages(2000 words)Case Study
Tourism in the Kingdom of Jordan
Just before his death, he appointed his son, Abdullah, to succeed him. King Abdullah II bin Hussein has both executive and legislative authority over the land. Jordan has a bicameral national Assembly. Jordan has unenviable distinction of being in the midst of a war like situation all around the country, without any active role in the war itself.
6 Pages(1500 words)Case Study
Chinese Economy Master Case Study
While the community centred world continued to work on the planned economies, the west went the free economy way. Whereas, the planned economies suffered a major set back when the Russian economy fell taking with it many of the planned economies as well, the free market economy kept on improving on its performance.
10 Pages(2500 words)Case Study
Middle-East and North Africa Countries
The countries in this region are also marked with high rate of poverty since 23% of the population in these countries lives at an earning of less than \$2 per day. The growth rate in these countries differs vastly because of the economic diversity. During the 1990s while some of the countries exhibited buoyant economic growth the others like Lebanon, Syria and Morocco displayed poor growth.
8 Pages(2000 words)Case Study
Leisure and Recreational Areas in Suzhou
It was 16 years ago when China came up with the idea of developing a modern industrial township with their Singapore experience at hand. Deng Xiaoping, the former China leader, recognized Singapore's achievements and at the same time, China's potential.
5 Pages(1250 words)Case Study
United States Bail-out of Banks
United States Bail-out of Banks Washington has embarked on a massive mission to rescue banks in the United States that are grappling in the sub-prime mess. Taking a laissez-faire stance, the government behind the scenes has instituted a covert bailout.
8 Pages(2000 words)Case Study
Stages of Japanese Post-war Economic Growth
According to the paper, the Japanese economy did not reach the high growth era all of at once, it passed several stages that turned the country’s economic and industrial direction considerably. The steps taken by the government, changes to the legislation, transformation of industrial structure and effectiveness of management led to that success.
6 Pages(1500 words)Case Study
Chinese Economy Case Study
Both EPZs and SEZs promote investments in export oriented activities but SEZs have become a prime catalyst for regional development in China. This is because of their diverse products and services. Asian EPZ's restrict their foreign investments to manufacturing.
3 Pages(750 words)Case Study
Let us find you another Case Study on topic Country's economy for FREE!
+16312120006