Question

What are the conditions that have allowed for modern economic growth in the last two centuries? How do technology, human capital, and physical capital affect productivity and economic growth? Think about how the increase in education that you are accomplishing adds to this scenario.

Answer 1

There are many factors which contributed for the modern economic growth.In the last two centuries,development and usage of modern equipment and technology in manuacturing process increased which boosted the economic growth. Special skills and talent of people helped in attaining maximum economic growth.Their skills and talent derived many unique techniques to accelerate the growth of the economy.Even capital investment got increased as people from both home and foreign countries are attracted towards gaining returns on invested amount and they started investing their savings in manufacturing industries.All these factors increased the demand for labour and output has been rised. Eventually,this caused modern economic growth and it was witnessed at a high rate in last two centuries.

Modern technology affects productivity and economic growth as installation and usage of modern technologies uplifts the output level which in turn leads to economic growth.So,when modern technology is used in production process, then high output can be obtained.In the same way,human capital and physical capital also affects both productivity and economic growth.Human capital is hiring the labour to produce more number of goods.If human capital is hired less then the requirement,then maximum output cannot be obtained and productivity will be low.Physical capital is investing and buying required equipment which helps in obtaining higher output.If maximum funds are invested in human and physical capital,then huge productivity can be gained.If higher productivity is obtained,then growth of the economy will boosted as maximum production,sales,purchases are witnessed.Hence modern technology,human capital and physical capital affects productivity and economic growth.

Education also contributes towards modern economic growth.If level of education is high,then individual contribution levels increases.If higher education is pursued,then higher qualification can be attained which makes a person earn maximum salaries.Higher education teaches new skills and makes a person more efficient and qualified for the jobs.Those skills are used to attain maximum production which in return boosts the growth of the economy.Hence,increase in education helps in attaining higher economic growth and also increases the literacy rate of the economy.