Pursuit of Economic Growth for a Nations’ Long Term Interest

Student ID: 40m0fm0f1016

Student Name: Sumaiya Islam Trisha

Lecturer: Zoeb Rahman

Contents

A review on: “Pursuit of economic growth for a nations’ long term interest”        3

Executive Summary        3

Introduction        4

Literature Review        4

Factors that aid economic growth        4

Ways to Achieving Long term economic growth        7

Long term Benefits of Economic Growth        7

Negative aspects of Economic Growth        9

Conclusion        10

Reference        11

Bibliography        13

A review on: “Pursuit of economic growth for a nations’ long term interest”

Executive Summary

This assignment has been prepared for the purpose of University course assessment for University of Wales Trinity Saint David (UK). The assignment examines the topic of economic growth and the long term benefits it provides for a nation. Economic growth and prosperity are closely interlinked. It provides national stability, better living standards and political and sovereign security. The most powerful nations on earth are first economically well developed and they relentlessly pursue economic development. As part of macroeconomics taking the broad view of economics, they are indespensible for citizenry and professionals. The assignment gives description of economic growth, states the long term benefits of economic growth and drawbacks and provides historical and current examples of economic growth as evidence for the work. Harvard style referencing have been used for source of data.

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Introduction

Economic growth is defined as the nation’s capacity to produce more of goods and services compared to previous timeline. The measurement is usually done in nominal or real basis. The real measurement is used in case of adjustments for inflation. The economic growth is measured in Gross National Product (GNP) and more commonly as Gross National Product (GDP). The aggregate productivity is increased, which boils down to simple fact such as productivity of laborer has increased (Staff, 2017). The growth is measured not in terms of quantity or tonnage, but in the value of goods, usually in dollars. The current market value is used to express economic growth. The subjective value of goods and services across all regions and industry is tricky. Economic growth growth results in increase in national income and output (Staff, 2017).

Literature Review

Factors that aid economic growth

The economic growth has various factors that enable a country to increase in productivity. The two prime factors are increase aggregate demand and aggregate supply. Utilization of scare capacity to quell the aggregate demand leads to growth. Consumer spending, fixed capital investment, exports, government spending and reduced imports lead to aggregate demand. Lower interest rates, fall in currency value, increased wages, low income taxes and rising house prices lead to an increase in aggregate demand (Staff, 2017).

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Resources: the discovery or acquisition of which has a chain reaction in the whole economy. The Great Californian Gold Rush of the 19th Century is an example of how a new resource such as Gold mine can change the economy of the country and region (American Bullion - Gold IRA, 2017). The betterment of a resource, which is usually achieved by technology, can lead to a boost of an already prevalent resource. Uranium is a mineral which was of little value in 19th century and early 20th century. After the discovery of radioactivity and nuclear fission, it became a highly prized mineral (World-nuclear.org, 2017). The economy of Middle Eastern countries such as Saudi Arabia, Iran, Iraq and Kuwait is based on discovery of oil in the Persian Gulf in mid 20th Century. Saudi Arabia is primarily an oil based economy having sustained growth since 1980’s (Cia.gov, 2017).

The other most common way to increase economic growth is to increase hands, that is to increase the labor force. Higher birth rates and arrival of immigrants increase the labor force (Staff, 2017). Historically, the economic growth of USA at turn of 19th century is accredited to cheap and productive immigrants that arrived the shores of USA from all over the world (White, 2017).

Technology is another way through which economic growth can be achieved and which is closely connected with capital goods. Investments in research and development and education can lead to discoveries that can change the economic growth positively. This in turn is dependent on savings and investments which lead to accumulation of investment (Staff, 2017). The investment on research and development by USA led to incredible discoveries in fields of electronics, computing and engineering after Second World War (Gordon, 2017). The inventions such as integrated circuit and microchip, programming and computing, Graphical User Interface and others have led to rise of companies such as Apple, IBM, Microsoft and Google and now they are the top companies in the world and provide millions of jobs to American as well as international employees and generate huge revenue for US and other countries (Field, 2007).