ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increased wages earned in a Malaysian-owned factory in China
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increased imports of goods and services
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increased outflows of net property income
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increased taxes on domestic expenditure
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Detailed explanation-1: -Causes of China’s Economic Growth Economists generally attribute much of China’s rapid economic growth to two main factors: large-scale capital investment (financed by large domestic savings and foreign investment) and rapid productivity growth. These two factors appear to have gone together hand in hand.
Detailed explanation-2: -Consumer income – An increase in economic growth causes unemployment to decrease and incomes to rise. This can be shown by the following formula: National output = National expenditure = National income. Therefore, if national output increases, so do incomes.
Detailed explanation-3: -China has combined government intervention with market opening and gradually established a dual-track socialist market economy. This approach has greatly stimulated private entrepreneurship while preventing economic turmoil. In 1978, there were almost no private enterprises in China.
Detailed explanation-4: -Manufacturing, services and agriculture are the largest sectors of the Chinese economy – employing the majority of the population and making the largest contributions to GDP. Since 1949, the Chinese Government has been responsible for planning and managing the national economy.