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Econ 12

Economic growth refers to the increase in production of goods and services over time, typically measured as the percentage increase in real GDP adjusted for inflation. It indicates higher economic activity and prosperity. Key determinants include capital goods, labor force, technology, and human capital. Types are actual and potential growth. Factors influencing growth are natural resources, political stability, economic policies, and infrastructure development. Positive impacts are higher income, more jobs, and better services while negatives can include environmental issues and inequality.

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20 views

Econ 12

Economic growth refers to the increase in production of goods and services over time, typically measured as the percentage increase in real GDP adjusted for inflation. It indicates higher economic activity and prosperity. Key determinants include capital goods, labor force, technology, and human capital. Types are actual and potential growth. Factors influencing growth are natural resources, political stability, economic policies, and infrastructure development. Positive impacts are higher income, more jobs, and better services while negatives can include environmental issues and inequality.

Uploaded by

Krusty
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Economic growth refers to the increase in the production of goods and services in an economy

over a period of time. It is typically measured as the percentage increase in real gross
domestic product (GDP), which is adjusted for inflation. Economic growth indicates a higher
level of economic activity and prosperity.

Key Concepts

1. Definition:
o Economic growth is an increase in the amount of goods and services produced
per head of the population over a period of time
2. Measurement:
o It is measured by the growth rate of real GDP, which reflects the value of all
final goods and services produced within a country in a given period, adjusted
for inflation
3. Determinants of Economic Growth:
o Capital Goods: Investments in machinery, infrastructure, and technology.
o Labor Force: Increase in the number of workers and improvement in their
skills (human capital).
o Technology: Innovations and improvements in technology that enhance
productivity.
o Human Capital: Education and training that improve the efficiency and
productivity of the workforce.
4. Types of Economic Growth:
o Actual Growth: An increase in the real output of an economy over time.
o Potential Growth: An increase in the economy's ability to produce goods and
services, represented by an outward shift of the production possibility frontier
5. Factors Influencing Economic Growth:
o Natural Resources: Availability and exploitation of natural resources.
o Political Stability and Good Governance: Policies and governance that
encourage investment and economic activity.
o Economic Policies: Fiscal policies, monetary policies, and trade policies that
support growth.
o Infrastructure Development: Availability of efficient transportation,
communication, and energy systems

Impacts of Economic Growth

1. Positive Impacts:
o Higher income levels and improved standards of living.

o Increased employment opportunities.


o Enhanced public services and infrastructure.
o Greater investment in education, health, and technology.
2. Negative Impacts:
o Environmental degradation due to increased industrial activity.
o Inequality, if the benefits of growth are not evenly distributed.
o Over-reliance on non-renewable resources, leading to sustainability issues

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