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Measurement Of Economic Growth

Economics notes

Measurement Of Economic Growth

➡️ Economic growth is the increase in the production of goods and services over a period of time. It is measured by the percentage change in real GDP (Gross Domestic Product) over a period of time.

➡️ Economic growth is important for a country's economic development as it leads to higher incomes, improved living standards, and increased employment opportunities.

➡️ Economic growth is driven by factors such as technological advances, increased capital investment, improved infrastructure, and increased human capital.

What is economic growth and how is it measured?

Economic growth refers to the increase in the production of goods and services in an economy over a period of time. It is measured by the Gross Domestic Product (GDP), which is the total value of all goods and services produced within a country's borders in a given period of time, usually a year.

What are the limitations of using GDP as a measure of economic growth?

GDP has several limitations as a measure of economic growth. Firstly, it does not take into account the distribution of income and wealth within a country, which can be an important factor in determining the well-being of its citizens. Secondly, it does not account for the value of non-market activities such as household work and volunteer work. Thirdly, it does not consider the negative externalities associated with economic growth, such as environmental degradation and social inequality.

How can a country achieve sustainable economic growth?

Sustainable economic growth can be achieved by promoting policies that encourage innovation, investment in human capital, and the development of new technologies. This can be done by investing in education and training programs, promoting research and development, and providing incentives for businesses to invest in sustainable practices. Additionally, policies that promote social and environmental sustainability can help to ensure that economic growth is not achieved at the expense of future generations.

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