37) The impact of economic growth

Question 1

What are the benefits of economic growth?

Answer 1

1) People have the basics (e.g. food, water, shelter)
2) Housing standards tend to improve
3) Literacy tends to improve
4) Health tends to improve
5) Greater ability to consume
6) Greater ability to save for unforeseen circumstances
7) Businesses thrive so jobs are created
8) Increases tax means gov can provide public goods

Question 2

What are the potential problems of economic growth?

Answer 2

1) Unsustainable
2) Inflation
3) Government debt
4) Inequality
5) Falling inequality in the long run
6) Easterlin Paradox (the idea that human happiness does not necessarily increase with growth