Economic growth

• Economic Growth is the growth in GDP(value of output) over time
• GDP(Gross domestic product) is the total value added of goods and services produced in the country in a year
• Rate of growth = ( change in GDP/original GDP ) x 100
• GDP per capita is the GDP divided by population
• Economic growth is an important macro-economic objective because it enables increased living standards, improved tax revenues and helps to create new jobs.
• Economic Growth can be caused by:

  • Higher investment
  • Improved technology
  • Education and Training
  • Increased labour productivity
  • - increased labour force(Number of people who work in a country)
• Benefits of economic growth:

  • A rise in material living standards
  • A reduction in poverty
  • A rise in the welfare of the population
  • A fall in unemployment
• Costs of economic growth:

  • Environmental costs
  • Air pollution
  • Global warming
  • Loss of non-renewable resources
  • Lower quality of life
  • Inflation, due to increase in prices