ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Decrease the cost of living
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Improve the quality and/or quantity of it’s factors of production
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Lower the interest rate
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Increase teacher’s salaries
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Detailed explanation-1: -Adding capital to the economy tends to increase productivity of labor. Newer, better, and more tools mean that workers can produce more output per time period.
Detailed explanation-2: -Natural resources are the number one factor that spurs economic growth. It makes economic growth considerably easier. Consider the case of countries like Dubai or other Middle East nations. The fact that they are rich in oil resources has literally been the defining factor of their economies.
Detailed explanation-3: -The Importance of the Factors of Production If businesses can improve the efficiency of the factors of production, it stands to reason that they can increase production and create higher quality goods at lower prices. Any increase in production leads to economic growth as measured by GDP.
Detailed explanation-4: -Economic growth – measured as an increase of people’s real income – means that the ratio between people’s income and the prices of what they can buy is increasing: goods and services become more affordable, people become less poor.
Detailed explanation-5: -Accumulation of capital stock. Increases in labor inputs, such as workers or hours worked. Technological advancement. 01-Jun-2015