ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An economy grows when it has the capacity to produce more. Production is based on how much capital, labor, natural resources, and technology it has to produce. Policies that encourage the accumulation of any of these leads to economic growth.

Detailed explanation-2: -With growth in productivity, an economy is able to produce-and consume-increasingly more goods and services for the same amount of work. Productivity is important to individuals (workers and consumers), business leaders, and analysts (such as policymakers and government statisticians).

Detailed explanation-3: -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.

Detailed explanation-4: -With growth in labor productivity, an economy is able to produce increasingly more goods and services for the same amount of work. And, because of this additional production, it is possible for a greater quantity of goods and services to ultimately be consumed for a given amount of work.

Detailed explanation-5: -Natural factors. Human factors. Population. Physical capital and technological factors. Institutional factors.