A Study On Economic Growth

877 Words Aug 9th, 2015 4 Pages
Robert Lucas, the 1995 Nobel laureate, has stated, “Once you start thinking about economic growth, it is hard to think about anything else.” (On the Mechanics of Economic Development) This is a subject that has been studied by many economists over the years. Economic growth is important to understand because it relates to how people will live along with how society will succeed in the future. “Without economic growth, higher income levels and living standards cannot be achieved.” (Macroeconomics) What is economic growth? Economic growth is the increase of goods and services produced over a period of time. This is important because as the economy grows people begin to prosper and have higher standards of living. Studies have also shown that as people begin to prosper they become more concerned with their environment and with their health. In areas where incomes levels have increased, money is being invested on cleaner air and water. A higher income provides for a higher quality of life by allowing people to have the funds to make their lives better. Economic growth is measured by the ratio of GDP to population, which means more goods and services per person. As a country experiences economic growth income levels grow and studies have proven that life expectancy also extends. The rule of 70 is a tool that assists with the understanding of sustained growth and to determine how many years it will take for income levels to double at various rates of growth. The…
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