Economic Growth: Evidence, Benefits and costs

Question 1

What are the main 3 benefits of economic growth

Answer 1

Living standards will increase
Lifestyle will change due to new products and processes
Income redistribution - richer governments make it easier to combat poverty

Question 2

What types of costs are there - name 6

Answer 2

Opportunity costs
Personal and social costs
Time distribution costs
Negative externalities
Growth and Happiness
Resource exhaustion

Question 3

What are the opportunity costs of economic growth

Answer 3

Growth requires investment which may not yield immediate return - thus sacrificing current consumption

Question 4

What Personal and social costs are there to economic growth

Answer 4

Growing economy means that some peoples skills will become obsolete/mechanized
Example - the industrial revolution and the introduction of CAD/CAM

Question 5

What are the time distribution costs of economic growth

Answer 5

Benefits will be reaped by the next generations meaning current generation will sacrifice without return

Question 6

What negative externalities will come from economic growth

Answer 6

Leads to increased pollution - smoke, sewage and carbon etc.
Congestion on roads and trains will make travelling difficult
Earths natural processes dealt easily with 1bn pop but now we have 8

Question 7

Why might there be happiness problems coming from economic growth

Answer 7

USA survey showed that the %of the population feeling very happy was no higher in 2000 than in 1960 despite a doubling of real income
Keynes estimated that by 2000 everyone in the UK should be able to live comfortably on a 3 day work week

Question 8

How does economic growth lead to resource exhaustion

Answer 8

since 1945 there has been a massive acceleration in the consumption of resources and the world pop has nearly doubled
Economic developments leads to living standards rising quickly and technology cannot currently support that level of consumption

Question 9

How is renewable resources a problem of economic growth

Answer 9

Demand placed on renewable resources threatens to destroy their natural recuperative cycle
Fisherman used to be a very small part of the predatory process but now with 8bn people fish are very scarce