sources of economic growth (1 Viewer)

[Insanity]

Okay, so this is probably most like obvious question to some of you guys, but for me ... when I was trying to do a practice essay, mind block. Tried looking in my textbook but couldn't find anything.

So academics and geniuses, the sources of economic growth if you will? Thanks in advance!

 

[sk8ie_boi]

The source of economic growth is really board, I mean.. Economic growth is based on aggregate demand, if that increases and so will economic growth.

So then under aggregate demand, you talk about influences on consumption and investment. What things [e.g. government polices] can encourage expenditure which boosts aggregate demand and therefore increasing economic growth.

 

[iamsickofyear12]

Economic Growth is based of Aggregate Demand, which is made of;
- Consumer Spending
- Investment by Firms
- Government Spending
- Imports and Exports.
Anything that increases any of these factors will cause economic growth.

There are almost an unlimited number of source of economic growth:
- anything that leads to consumer spending which is pretty much more disposable income (decrease in the interest rate, decrease in income taxes, increase in wages, increase in the australian dollar)
- anything that leads to more investment by firms (lower interest rates)
- anything that leads to government spending (budget surplus)
- exchange rates effecting imports and exports

 

[Rafy]

When Injections are greater than leakages there will be economic growth.

e.g aggregate demand. which is the total demand for goods and services in an economy.

So yeah to find the sources of economic growth you must examine the reasons why each injections and leakages occur (which as iamsickofyear12 points out, there are many)

 

[Mandy101]

Some include:
- Improvements in productivty (technological progress, increased efficiency of factors of production)
- Institutional improvements (encouragement of export industries for example)
- strong aggregate demand (increased consumer, business, government spending etc)
- weaker exchange rate