What factors affect economy?
Give Short Note.
Answers
Answer:
Levels of infrastructure – e.g. transport and communication. In recent years, economic development in Central Africa has been improved due to increased investment in roads, railways and seaports. Part of this investment has come from Chinese companies who have a vested interest in transporting raw materials from Africa to China.
Education- Levels and standards of education have a significant influence on labour productivity. Without basic literacy and numeracy, it is difficult for an economy to develop from manual labour to new higher tech industries in the service sector.
Levels of inward investment. Developing countries that can attract inward investment can see significant growth in development due to higher levels of capital and benefits of attracting multinational companies into their economy. For newly industrialised countries (NICs), inward investment has played a significant role in increasing economic development.
Levels of savings/capital In growth models, such as Harod Domar, levels of savings and capital are seen as a key factor in determining economic growth. Higher savings enables a virtuous circle of increased investment, higher growth, and therefore, higher savings.
Explanation:
Six Factors Of Economic Growth
Natural Resources. The discovery of more natural resources like oil, or mineral deposits may boost economic growth as this shifts or increases the country's Production Possibility Curve. ...
Physical Capital or Infrastructure. ...
Population or Labor. ...
Human Capital. ...
Technology. ...
Law.