2.5.4: Impact of economic growth

• Impact of economic growth on consumers

  Increased demand for housing

  Increased consumption due to wealth effect from house prices rising

  Better technology available, leading to higher quality goods

  Increased inequality

  Inflation
• Impact of economic growth on firms

  Increased investment as businesses are successful

  Increased business confidence

  New firms can establish themselves

  Firms who sell inferior goods may lose out
• Impact of economic growth on the government

  Rising tax revenues -Leads to improved living standards

  Reduces government budget deficit

  More expectations from people for the government
• Effects of growth on current living standards

  Decreased poverty

  Increased quantity of goods and services

  Increased housing standards and good quality

  Better health
• Effect of growth on future living standards

  Increased education standards

  Possible inequality as the rich may exploit the poor

  Possible environmental damage due to increase in usage of energy