ECONOMICS
ECONOMIC GROWTH
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
an increase in inflation
|
|
|
an increase in the working hours of the population
|
|
|
a sacrifice of potential present consumption
|
|
|
greater inequality in the distribution of income
|
Detailed explanation-1: -Environmental costs Increased economic growth will lead to increased output and consumption. This causes an increase in pollution. Increased pollution from economic growth will cause health problems such as asthma and therefore will reduce the quality of life.
Detailed explanation-2: -Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Either can increase the overall size of the economy but only strong productivity growth can increase per capita GDP and income.
Detailed explanation-3: -Opportunity Costs for Consumption If you decide to spend money on a purchase, then you forgo the opportunity to spend that money on other purchases.
Detailed explanation-4: -The opportunity cost of producing investment goods or capital goods required for growth is the amount of reduction in the production of goods for current consumption and it will cause people’s current living standards to fall.