Positive and Negative Effects of Economic Growth

Question 1

Positive Impacts of Economic Growth:
Households:

Answer 1

• More employment
• Higher incomes
• Higher living standards
• Greater variety of goods

Question 2

Positive Impacts of Economic Growth:
NZ Producers:

Answer 2

• Innovation increases
• Increased sales
• Revenue and profit
• More profits for investment and Research and Development (R & D)

Question 3

Positive Impacts of Economic Growth:
NZ Exporters:

Answer 3

• Increase in competitiveness as productivity increases
• New products
• New markets

Question 4

Positive Impacts of Economic Growth:
Government:

Answer 4

• Decrease in transfer payments
• Increased tax revenue from income, GST and company tax

Question 5

Positive Impacts of Economic Growth:
Technology:

Answer 5

Increases resource use efficiency and sustainability.

Question 6

Negative Impacts of Economic Growth:
Households:

Answer 6

• Jobs replaced by machines
• Increasing prices
• Increased stress
• Increased inequality (some group benefit more than others)

Question 7

Negative Impacts of Economic Growth:
NZ Producers:

Answer 7

• Costs increase as demand for raw materials rise
• Inflationary pressure
• Competition with cheaper imports

Question 8

Negative Impacts of Economic Growth:
NZ Exporters:

Answer 8

• Export prices rise due to inflationary pressures caused by increased demand for resources and labor.

Question 9

Negative Impacts of Economic Growth:
Government:

Answer 9

• Required to control inflation pressure
• More spending to combat increased crime and anti-social issues.

Question 10

Negative Impacts of Economic Growth:
The Environment:

Answer 10

• Increased resource depletion
• Pollution and waste problems
• Unsustainable resource use