Homework Question on Economic and Growth Determinants
- List determinants of economic growth and provide a short explanation for each factor.
- Find the U.S. real GDP growth rate for the past 20 years and plot them s a graph and describe your finding on fluctuations of the U.S. real GDP.
- Make sure all sources that you used is an online sources so I have access to them follow the paper instructions watch out for spelling and grammar.
Homework Answer on Economic and Growth Determinants
Determinants of economic growth
Capital is combined with labour to produce products and services. Employees require machines, tools as well as industrial units to work. Certainly, the use of money makes employees more productive. In this case, setting up plants supplied with tools and machinery raises the productive capability of the financial system. Therefore, formation of funds acts as the main cause of economic expansion. Whatever the kind of economic system, with no funds accumulation the economic development process cannot be hastened.
The use of advanced technology in production brings about a considerable increase in output per capita. Technological progress is the innovation of new and enhanced ways to do things or improvements in the old approaches. Sometimes technological progress leads to an increase in the available supply of natural resources, but mainly results in an increase in effectiveness or productivity with which capital, labour and natural resources are used to produce products.
The growth in population boosts the level of productivity by escalating the number of labour force or working population so long as all are engaged in a productive employment. Growing population refers to developing market for products that facilitate the growth process. Thus, when the market for products is made bigger, they can be manufactured on large scale thereby reaping economies of large-scale production (Petrakos & Arvanitidis 16).