Economic Growth evaluation - Theme 2
- Created by: Yzaman
- Created on: 23-02-18 18:35
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Benefits of economic growth:
Consumers:
- Incomes increase, more employment therefore increase wages.
- People can afford to save money for future consumption.
- Confidence increases, therefore increase consumption and higher living standards.
Firms:
- Make more profit, as consumer spending increases as firms sell more.
- Revenue and profits increase, take on more workers and invest more.
- Increase in future growth prospect.
- More economic growth in export market, firms face more competition therefore become more efficient and productive.
- Higher investment level therefore develop new technology which improves productivity and lowers average cost in the long run.
Government:
- Increase in income, increase in tax revenue.
- Government has less demand to pay unemployment benefits and income support.
- Government budget may improve.
Current and future living standards:
- Wealth effect as income increases.
- Poverty decreases as wages and employment rise.
- Government spends money on areas…
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