Economic Growth Flashcards
Benefits of Economic Growth
Higher incomes. Rising real GDP enables consumers to enjoy more goods and services and enjoy better standards of living.
Lower Unemployment. Economic growth encourages firms to employ more workers
Improved government finances. EG creates higher tax revenues and there is less need to spend money on benefits such as unemployment benefits. EG can reduce debt to GDP.
Improved public services. With increased tax revenues, the gov can spend more on healthcare and education.
Money can be spent on protecting the environment with higher real GDP a society can devote more rescources to promoting recyling and the use of renewable sources.
Costs of Economic Growth
Inflation. If growth is too fast, it may lead to inflation.
Boom and bust cycles. If EG is too dast and unsustainable, it can lead to boom and bust cycles.
Environmental problems. Higher growth can lead to more pollution and environmental degredation. It can also lead to more pollution.
