Question

The text highlights various aspects that governments can focus on in promoting a good environment for economic growth? What aspects do you think can be most beneficial to a growing economy? Use specific examples from at least one country’s recent economic growth experience.

Answer 1

Economic growth can be characterized as an increase in an economy's capacity to produce goods and services over a given period of time. Economic growth in economics refers to a long-term expansion of the economy's productive capacity to meet the needs of individuals in society. A country's sustained economic growth has a positive impact on national income and employment levels, resulting in a higher standard of living.

In fact, by raising tax revenues, it plays a vital role in improving government finances. This allows the government to earn additional income for an economy's further growth. A country's economic growth can be calculated by comparing the rate of a year's Gross National Product (GNP) with the previous year's GNP. A country's economic growth is possible when its strengths and weaknesses are evaluated properly.

Economic growth is directly linked to a country's percentage increase in GNP. In real sense, economic growth is connected to a rise in national production per capita or a country's net national output that has remained constant or maintained for many years. Economic growth can be achieved if the rate of total output increase is greater than a country's population increase rate. For example, India's GNP growth rate was 9.1% in 2005-2006, whereas its population growth rate was 1.7%

The efficient utilization or exploitation of natural resources depends on the skills and abilities of human resource, technology used and availability of funds. A country with a skilled and educated population with rich natural resources is on the road of development for the economy.

Developed countries such as the United States, United Kingdom, Germany, and France are the best examples of such economies. There are, however, countries with few natural resources, but high per capita income, like Saudi Arabia, so their economic growth is very high. Moreover, Japan has a limited geographical area and few natural resources, but because of its powerful human resources, it enjoys high growth rates.

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