A look at whether we actually need economic growth in a modern economy. Readers Question: When I compare my life with my fathers at that time the conditions are near identical in the greater things or life. I work the same hours, maybe more. I have the same holidays. I have a similar standard of …
Readers Question: Is rise in prices a reflection of economic growth? A sustained rise in prices is known as inflation. A large rise in prices / higher inflation rate is often caused by economic growth. However, there are also occasions, when we can get inflation despite weak or negative economic growth. Inflation caused by economic …
The current US administration have suggested they want to increase the US budget deficit to enable higher rates of economic growth. What does economic theory state about this idea? “We need to have new deficits because of that. We need to have the growth,” Mulvaney said. “If we simply look at this as being deficit-neutral, …
Readers Question: I would like your help in answering a query of mine………Is foreign exchange rate an indicator of economic growth? No. The foreign exchange rate is determined independently to the economic growth rate. The exchange rate can have an influence on economic growth. And the economic growth rate can influence the exchange rate. But, …
Economic growth per capita looks at the average increase in real GDP per person. We could have economic growth of 3% a year. But, if population growth is also 3%, then average incomes – Real GDP per capita will remain the same. If the population declines by 2% a year, but real GDP increases 1% …
The trend rate of economic growth is the average sustainable rate of economic growth over a period of time. It is determined by growth in productivity.
Economic growth means an increase in real GDP – an increase real incomes. This is usually considered beneficial, but there are also potential costs of economic growth such as: Inflation Boom and bust economic cycles Current account deficit Environmental costs – pollution, loss of non-renewable resources Congestion Potential of widening inequality. The costs of economic …
Readers Question: Does the level of real income grow as the economy grows? Can we say that real income grows as the economy grows? If yes, what factors surround it? Summary In a period of positive economic growth, usually, you would expect a rise in real wages and higher pay. However, it is not guaranteed. …