Some forms of this argument even suggest that eventually the damage caused to these resources can itself become a limit on growth. In the case of individuals this tends to have diminishing returns. Fast economic growth has, in a sense, made them richer. the Chinese guide asks. Optimum Use of Resources: Under economic planning, resources are optimally used. The idea of convergence in economics (also sometimes known as the catch-up effect) is the hypothesis that poorer economies' per capita incomes will tend to grow at faster rates than richer economies. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. It has been the standard measure of economic strength ever since. A few years ago, the State Environmental Protection Administration did try to factor pollution costs into the country's GDP figures. The volatility of rapid economic growth as it departs from its major trend, has a very short-term effect (within a year) to increase mortality-partly owing to … high birth rates and rapid population growth in poor countries would divert scarce capital away from savings and investment, thereby placing a drag on economic development This view underpinned the major rise in international funding for family planning in the 1960s and 1970s, with the aim of reducing birth rates and hence rates of population growth. Answer: D. Economic development refers to a. In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. As poorer people gain access to affordable goods and services, the benefit is dramatic. But GDP measures quantity, not quality. Increased output of particular goods also tends to mean lower production costs per … The following arguments can be advanced in favour of economic growth. A. C) There is a direct relationship between a growing real GDP and rising pollution. The higher level of saving ensures a higher rate of investment and capital formation which stimulates growth. Economic growth, cumulatively over at least a decade, has been the central factor in mortality rate decline in the US over the 20th century. All production is regarded as positive, even if the pollution it causes reduces the productive capacity of the agricultural sector and pushes up health care costs. b. Summarize the arguments for slowing down the rapid growth of GDP? For example, GDP counts all investment as positive, whether or not that investment turns out to be productive in the longer run. For the princely sum of 14,500 yuan (HK$16,800), the magazine's Beijing correspondent joined 30 or so mainlanders for a gruelling 10day, five-country coach tour of Europe. This observation was confirmed in a major study by the Organization for Economic Co-operation and Development (OECD), The material in this section is based on Organization for Economic Co-operation and Development, The Sources of Economic Growth in OECD Countries, 2003. whose members are listed in Table 8.1 “Growing Disparities in Rates of Economic Growth.” Economic growth might also not be socially desirable. These projects add to GDP growth in the short term but do nothing to advance economic development. 69. Economic growth plus changes in output distribution and economic structure. Economic growth is an increase in the production of goods and services in an economy. The benefits become less dramatic as people become richer, and some surveys suggest there comes a point when increased access to goods or services does little to improve a person's well-being. Better pay for each job. This consideration is especially important for China. C) Rapid growth is not sustainable in the long term due to resource limitations. For example, raising the average education level o… I kind of get what the writer is saying here about the limit on what good economic growth can do for poor people. a) Limiting growth will contribute to more income equality across nations. But equally, for their part the visitors were taken aback by the leisurely pace of life in Europe, where the locals linger over coffee, prohibit bus drivers from working more than 12 hours a day, and even stop their cars for pedestrians. Economic growth is potentially a good thing. At least in principle, governments can work to enable the benefits of agglomeration to be better achieved and the costs of congestion to be reduced. And as our travellers' comments show, their message resonates strongly with China's people, or at least those rich enough to take package tours round Europe. b. communism. That shouldn't have been too surprising given that maintaining high headline GDP growth has become an obsession with China's leaders, who tout rapid growth as the justification for their authoritarian rule. Goals for more growth should specify more growth of what, and for what." But unfortunately the GDP measure by which both China's government and its travelling classes set such store is a deeply flawed measure of true economic progress. As a result, all economies should eventually converge in terms of per capita income. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. Rapid economic growth has not solved sociological problems like poverty and homelessness b. The Republic of Korea, one of the so-called "East Asian tigers", achieved extremely rapid economic growth and industrialization following the upheaval resulting from the Korean War (1950-1953). In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. Inequality Higher rates of economic growth have often resulted in increased inequality because growth can benefit a … Although the country's leaders aren't building pyramids, they may be doing the modern equivalent: building hundreds of expensive airports, high-speed rail lines and glittering financial centres that can never hope to generate a return on the investment involved. According to Geert Hofstede, which of the following is a key cultural dimension that helps account for rapid economic growth in Asia? GDP was developed in the US during the Great Depression, and came into its own during the second world-war as a measure of how many guns, ships and planes the US economy was able to produce. There are, however, positive and negative effects of economic growth and one of the negatives is the damage growth does to the environment. What Are the Characteristics of Modern Economic Growth? Several arguments suggest that low-income countries might have an advantage in achieving greater worker productivity and economic growth in the future. The rapid productivity growth experienced in 1995-2012: ... but we cannot better it anymore. Governments often try to increase the growth rate because it will have various advantages. Rising incomes allow people to buy more education medical care, and recreation Pro-growth c. The Earth has only finite amounts of natural resources Anti-growth d. Identify the following arguments about economic growth as being either anti-growth or pro-growth a. Firstly, higher GDP implies the economy is producing more goods… Under certain condi-tions moderate population growth can be benefi-cial. Which of the following was a reason for the rapid growth of boom towns in the West during the late 1800s? ADVERTISEMENTS: Rapid Population Growth as an Obstacle to Economic Growth! B) Economic growth rates tend to be higher in countries where the government enforces property rights. More jobs for people who want one. If you would prefer a pdf version of the original article, please follow the link below: Topic pack - Macroeconomics - introduction, 2.1 The level of overall economic activity (notes), Examining the three methods of calculating national income, Short term fluctuations and long term trends, 2.1 The level of overall economic activity (questions), Section 2.2 Aggregate demand and supply (notes), Section 2.2 Aggregate demand and supply (simulations and activities), 2.2 Aggregate Demand and Aggregate Supply (questions). As of 2017, the following countries have made the top ten list of fastest growing economies; interestingly, they are all developing countries. 2) One argument concerning economic growth made the following argument. Could get jobs of living of the author ), medical care, other. 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