Advantages of Economic Growth

Advantages of Economic Growth Economic growth can be defined as a process for indicating the increase or decrease in per capita GDP. There are a lot of other factors such as increasing in aggregate income of the individuals reflect economic growth. Economic growth is usually calculated as the rate of GDP changes in a particular period. The total of goods and services produced considered as a reflection for economic growth in the country. It can either be negative or positive in depend on the decrease or increase compared to data of previous years. Negative growth is often indicated to economic recession. When the GDP of a country increases means there is a economic growth existed in the country or the global economies Advantages of Economic Growth. Standard of living of the people will increase Economy growth is an important point to bring better living standards and lower rates of poverty. The average income of people can said that increases and indirectly people able to consume more and motivate the economic growth increasing. Rising Employment Economic growth stimulates employment. The economic growth produces more vacancies for job and bring better standard of living to them. Increased capital investment. Economic growth can used to increasing the capital investment. Benefit to Government Economic growth brings advancedÂÂ  tax incomes for the government, Because of this, the government spends less unemployment benefits. Superior public services. Due to government got government income as economy growth, it can spend more on public services like education for contributing in superior public services. EnhancedÂÂ  businessÂÂ  confidence Economic growth creates positive effect as encourage people running their businesses. As profits of small firms and business increase with economic growth, their business confidence and will to grow up to meet more challenges. Disadvantages of Economic Growth. inflation Potential High and rising inflation will occur due to demand grows faster than long run productive. It may destabilizing for an economy as interest rate may increase and can cause a loss of competitiveness in international markets Regional disparities Although average living standards may be rising, there is a gap between rich and poor. It can widen the issues of poverty and make a wide gap between different regions. Pollution Economic growth never separated from environmental issues. Rapid growth of production and consumption may create environment pollution such as sound and air pollution and road congestion. Environmental damage may bring negative effects on our quality of life. For the example, road congestion will produce more Co2 in a high density area. The health of residents in that area will been affected. Relationship between unemployment and economic growth. How does unemployment affect your economy? Wealth drainage The government need provides monetary assistance when someone unemployed, so a high unem ployment rate means that it has to pay more fund to help a large number of unemployed people. It is creating a heavy burdenfor a government. Wealth is drained for unproductive purposes and economic growth slows down. Slack in flow of money Unemployment slows down the circular flow of income by the lack of money inflow and outflow. When money does not pump into the economy, its growth becomes slowed down even stuck.