Why is economic development preferred over economic growth?
Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, we would expect economic growth to enable more economic development. Higher real GDP enables more to be spent on health care and education.
Why is economic growth not sufficient for development?
Economic growth measures growth in monetary terms and looks at no other aspects of development. Economic development looks at increase in productivity while taking into account factors like economic, social and political issues. Very often economic growth in a nation does not bring about economic development.
What are the factors that hinder economic development?
The paper finds that public borrowing, trade deficit, military expenditures, population, political instability, corruption, the high dependency on natural resources and the low level of technological innovation, all hinder GDP in the long run.
What are the two most important factors that encourage economic development?
Important economic factors include:
- Natural resources.
- Power and energy resources.
- Capital accumulation.
- Technological resources.
- Available labor force.
- Transportation and communications.
- Education and training.
What are the factors that affect economic development?
Economists generally agree that economic development and growth are influenced by four factors: human resources, physical capital, natural resources and technology. Highly developed countries have governments that focus on these areas.
What are determinants of economic growth?
There are four major determinants of economic growth: human resources, natural resources, capital formation and technology, but the importance that researchers had given each determinant was always different.
What are the 5 determinants of economic growth?
It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural resources, reforms and geographic, regional, political and financial factors.
What are the three measures of economic growth?
The three most common ways to measure real GDP are: Quarterly growth at an annual rate. The four-quarter or “year-over-year” growth rate. The annual average growth rate.
What are two ways that economic growth is measured?
The total output of the economy can be measured in two distinct ways—Gross Domestic Product (GDP), which adds consumption, investment, government spending, and net exports; and Gross Domestic Income (GDI), which adds labor compensation, business profits, and other sources of income.
Which of the following is the best measure of economic growth?
Real gross domestic product
Who benefits from economic growth?
The benefits of economic growth include. Higher average incomes. Economic growth enables consumers to consume more goods and services and enjoy better standards of living. Economic growth during the Twentieth Century was a major factor in reducing absolute levels of poverty and enabling a rise in life expectancy.
What is the relationship between economic growth and economic development?
The results indicated that economic development causes economic growth in the long and short run. Therefore, it is important to focus on economic development, through improved HDI, increased employment and poverty alleviation, in order to achieve inclusive economic growth.
What are the pros and cons of economic growth?
Pros and cons of an increase in economic growth
- Increased consumption.
- Higher investment in public services.
- Lower unemployment.
- Possible inflation.
- Current account deficit.
- Environmental costs.
- Income inequality.
- Social costs of economic growth.