ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In macroeconomics three of these goals receive extra focus: economic growth, price stability and full employment. Economic growth refers to a nation’s ability to produce more goods and services over time.

Detailed explanation-2: -An increase in government expenditure, or a decrease in the tax rate, stimulates spending, output, and employment. However, once full employment has been achieved, the stimulative effect of the government deficit becomes inflationary.

Detailed explanation-3: -Economic growth is driven oftentimes by consumer spending and business investment. Tax cuts and rebates are used to return money to consumers and boost spending. Deregulation relaxes the rules imposed on businesses and have been credited with creating growth but can lead to excessive risk-taking.

Detailed explanation-4: -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.