what provision should be made for economic growth
Answers
Answer:
The 2007-09 recession was painful on many levels, and the economy's recovery has been slow and uneven. This period of slower-than-expected growth has contributed to a longer-running conversation among economists and policymakers about economic growth. More specifically: What causes economic growth? And how can countries encourage faster growth?
First, we need to know why growth is important. Economic growth is an increase in the amount of goods and services that an economy produces. Economic growth results in rising wages and higher standards of living for citizens (measured as increases in real gross domestic product [GDP] per capita); it allows a society to increase its consumption of goods and services. We can think of the economy as a pie. One way to get more of some good or service, say health care, is to allocate resources differently. If we slice the pie into different-sized pieces, a bigger health care slice (more spending on health care) means a smaller education slice (less spending on education) because the pie is only so big.
Economic growth can also be discussed as an increase in the productive capacity, or potential output, of an economy. Using this thinking, rather than resizing the individual slices, economic growth leads to growing the size of the entire pie, so that over time each person receives a bigger slice without redistributing resources. In short, economic growth reduces the sting of scarcity—the condition that exists because there are not enough resources to produce everyone's wants. Scarcity forces individuals and society to make choices about how to best allocate resources. Of course, every choice involves an opportunity cost, the next-best alternative given up as the result of a decision. So, while scarcity requires trade-offs between health care and education, economic growth allows for more of both.
Economic Expansion or Economic Growth?
When economists think about the causes of economic growth and strategies for promoting growth, they think beyond the fiscal and monetary policies that are designed to buoy the economy temporarily during an economic downturn to consider the conditions that help promote long-term growth. During an economic recession, an economy might be operating with a larger-than-average amount of unemployed resources. That is, the economy is operating below its productive capacity. Policies designed to push the economy back toward its productive capacity—thereby increasing the pace of economic activity—might be used during an economic recession to move the economy back toward its potential. The movement back toward potential is often referred to as economic expansion. Alternately, long-run economic growth is an increase in an economy's productive capacity.
Where Does Growth Come From?
Three factors can create economic growth: more capital, more labor, and better use of existing capital or labor. The growth that results from increases in capital and labor represents growth due to increases in inputs. There are limits to how much accumulating capital helps, and increasing labor also often means more mouths to feed and so (by itself) may not increase the standard of living (real GDP per capita). Sustainable long-run growth is the result of better use of existing resources, increasing economic output per input and thereby increasing productivity.
Improving medical facilities, better education facilities, better infrastructure, etc should be included in the policy-making for economic growth.
Explanation:
- Various provisions for improving medical facilities, improving educational facilities, infrastructure, etc. Should be made for better economic growth.
- It is also important to mention that economic growth is not measured only in terms of per capita income. It also includes other aspects such as the standard of living, poverty index, employment opportunities, etc in a nation.
- Improving all the situations would actually mean that the economy is growing and there is an improved situation in the country. Provisions for all these should also be made.