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There are various driving forces contributing to an economic growth, namely, improvement in technology and productivity, increases in the levels of economic activity, efficient Human resource management, greater access to capital resources, etc. Economic growth is essential because it drives the country towards improved standards of living as well as enables it to be in the lead in today’s competitive environment in the international market. (Term, “Economic Growth” from Investopedia)
Aggregate Demand is defined by the demand of goods and services that will remain constant at any price level of such goods and services. The Aggregate Supply-Aggregate Demand Model is a macroeconomic model. This model is basically used to facilitate the analysis and evaluation of the factors that have an impact on the level of Real Gross Domestic Product (i.e. GDP adjusted for inflation) and the level of inflation. This model works on the quantity of output of an entire economy also known as the national production of a country. Below is a pictorial representation of this model:
The Real GDP as shown in the above figure represents the quantity of output of the economy. The equilibrium of the Real GDP is reached at the point where the Aggregate Supply (AS) Curve interacts with the Aggregate Demand (AD) Curve. Furthermore, this equilibrium also determines the national inflation rate. The negative slope of the Aggregate Demand (AD) Curve is as a result of the fact that the purchasing power of a buyer will increase with the reduction in prices at any given level of nominal income. While studying the Aggregate Supply (AS) Curve it can be identified that initially it is nearly flat and is then followed by a sharp vertical turn. The flat curve is an indication of the absence of inflation in that period whereas in the latter portion of the curve the case is vice-versa.
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In the given paper, different theoretical factors are discussed to understand how banks and stock exchange influence the economic growth. The banking system acts as an intermediary that mobilise the funds from individuals to the enterprises. Similarly, the stock market is a platform through which the companies can raise capital for the business.
Since it helps the economy to produce more, more goods are produced and everyone has more goods for consumption, living standard in the economy increases. This is why economists rate economic growth as a matter of great importance. If an economy is growing at 2.5%, the economic growth or total output will double from the current level in 70/2.5= 28 years.
For example if we take two sample countries i.e. Brazil and Cuba. The real GDP per capita for Brazil and Cuba in 2005 are 7524.542969 and 9142.791016 respectively. The resultant openness is 26.66373062 and
Since technology is the propelling power in this information age, its prudent to incorporate it in the economic policies for the purposes of alleviating poverty, job creation and equitablу distribution of wealth.
Major ways through which protectionism is undertaken is through application of tariffs and imposing subsidies on the exports. Similarly, the government may use methods such as import quotas, strict legislation, non-tariff barriers and taxes as ways of restricting free trade.
High-income countries continue to invent new technology that low-income countries apply when already easy to comprehend. With an already built technology, coming up with innovations to improve the technology is simplified. Low-income countries
The reports reveal that Egypt Foreign Reserve position has registered a measure of stability, although there is still a level of uncertainty. Additionally, Egypt’s inflation rates have gone down as highlighted by
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