What are Advantages and Disadvantages of Economic Development?
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Benefits of economic growth
Increased consumption : Firstly, higher GDP implies the economy is producing more goods and services and therefore consumers can enjoy more goods and services
Higher investment in public services : With higher GDP the government will be able to collect more taxes; this is because people as incomes rise and people spend more they will pay more income tax and VAT.
Lower unemployment : Higher economic growth will also lead to an increase in demand for labour as firms will be producing more. Therefore unemployment will fall.
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Economic growth creates higher tax revenues, and there is less need to spend money on benefits such as unemployment benefit. Therefore economic growth helps to reduce government borrowing. Economic growth also plays a role in reducing debt to GDP ratios ...
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