ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increased exploitation of a country’s mineral resources
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investment financed by borrowing from abroad
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investment financed by high rates of domestic savings
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technological innovations in productive processes
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Detailed explanation-1: -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-2: -There are many potential reasons for a weakened economy, from domestic political factors to worldwide market conditions. Regardless of the proximate causes, high levels of unemployment, debt, or inflation can cause economic weakness by reducing consumers’ discretionary spending.
Detailed explanation-3: -Technological progress allows for the more efficient production of more and better goods and services, which is what prosperity depends on. However, the mechanisms through which technology is developed, adopted and used in production are complex.
Detailed explanation-4: -Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy. How these factors are combined determines the success or failure of the outcome.