Economic Growth evaluation - Theme 2

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  • Created by: Yzaman
  • Created on: 23-02-18 18:35

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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