Discuss the main adverse repercussions on the economy that the process of economic growth can have?
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✨Economic damage Recessions result in higher unemployment, lower wages and incomes, and lost opportunities more generally. Education, private capital investments, and economic opportunity are all likely to suffer in the current downturn, and the effects will be long-lived.
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Discuss the main adverse repercussions on the economy that the process of economic growth can have?
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Economic growth is a major field of study, due to the significant impact it has on society in general, as well as the various units that make up society.
The main adverse repercussions on the economy that the process of economic growth can have is the Inflation effect and a decrease in sustainable growth.
- Inflation Effect:- The major adverse repercussion of economic growth is the inflation effect. Economic growth will result in aggregate demand increasing. If aggregate demand rises faster than the rise in aggregate supply, then there will be an additional demand but a deficit in supply in the economy. Hence, producers will tend to increase the price and this situation is known as inflation. When aggregate demand goes on to increase but the economy is already at its maximum productive potential, overheating will arise. This will then drives high inflation with limited or no gain in output.
- Decrease In Sustainable Growth:- Economic growth implies that a large number of raw elements are required for manufacturing more goods and services and this can accelerate the depletion of non-renewable resources. Hence, economic growth which defects the environment will then result in a decrease in the rate of sustainable growth
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