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Module 1: Economic growth

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Effects of Economic Growth

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XSIQ
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Economics - Effects of Economic Growth

Effects of Economic Growth

* Strong growth will tend to increase the chance of the poor gaining
employment and reducing the numbers of people living in relative poverty.
The proceeds of economic growth may even be used to help the homeless,
thereby reducing the numbers living in absolute poverty.

* With the increased taxation revenue generated from strong economic
growth, the government may be able to provide more collective goods and
services. [1] Higher social welfare payments also become an option.

* With more goods and services produced, material living standards
certainly increase. Non-material living standards may also improve if
economic growth contributes to more leisure time.

* The pursuit of growth may lead to atmospheric and water pollution as
factories try to dispose of their waste and more motor vehicles clog our
roadways. Growth could also lead to the depletion of our non-renewable
resources.

* Inflation will occur if aggregate supply cannot keep up with strong
growth in aggregate demand.

* The increased demand for imports usually associated with strong
economic growth, will add to the trade deficit.

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[1] http://alison.com/#