Economic Growth, Investment Decisions and Economics of Regulation
Economic Growth:- Refers the amount of goods and services that are produced by per head of population over a period of time
Investment Decision:- Refers to the decision of the person who is investing the money or the person of top level management with respect to the amount of money to be invested in different investment opportunities.
Economics of Regulation:- Refers process of imposing rules by government and any governing body .Regulations have impact on both micro and macro economics factor.
Economic Growth :- Growth of an economy depends upon growth enabling factors followings are some
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Developed nations are generally at the cutting edge of technology so they should be focused on higher education for increasing per capita of GDP
Developing nations should be focused on primary and secondary education to have greater impact on growth of GDP never the less investment should be made at all level of education Tax and Regulatory Systems:- The countries in which tax system supports entrepreneurship grows faster then the countries where tax system does not support entrepreneurship
Free Trade and Unrestricted Capital Flows :- free trade policies and Unrestricted Capital Flows enable a economy to grow at a faster rate like
FDI(foreign direct investment) where foreigners are allowed to invest in capital development and infrastructure development of country and
FPI(foreign portfolio investment) where the foreigners are allowed to invest in the equity of country examples countries like Brazil and India
Factors Limiting Growth in Developing Countries
Low saving and investment:- low savings and investments leads to lower capital lower capital leads to slow economic growth since capital and labor are primary factor for growth of an economy
Poorly developed financial markets:- financial market:- Financial Markets and Intermediaries help in Allocating funds to projects with highest risk-adjusted returns it become difficult for a country having Poorly developed financial markets to allocate fund efficiently that leads to slows down in economic
Economic growth is an increase in the capacity of an economy to produce goods and services from one period of time to another. In simple terms, it refers to an increase in aggregate productivity.
Assess the significance of three factors which might limit economic development in the developing countries.
Economic Development: Growth is associated with structural, social change and change in the important institutions of the economy.
Economic growth is a common term used by economists to describe in increase in production in the long run. According to Robinson (1972) economic growth is defined as increases in aggregate product, either total or per capita, without reference to changes in the structure of the economy or in the social and cultural value systems. The basic tool of measuring the economic growth includes the real GDP. It provides some quantitative measures in terms of the production volume.
Economic growth refers to the output of goods and services produced per capita in a nation over time. It is measured as the percent rate of increase in Real Gross Domestic Product(GDP) which is the value of total productions produced by an economy in
Economic growth is best defined as a long-term expansion of the productive potential of the economy. Sustained economic growth should lead higher real living standards and rising employment. Short term growth is measured by the annual % change in real GDP.
First of all, economic growth is one of the macroeconomic objectives that the government wants to achieve as a primary goal and it happens when there is a rise in the enlarged product of population and per capita consumption. According to Hoover (2011), economic growth is the total material output of good values and service values in the market, measured by Gross Domestic Product (GDP) in a specific period of time. The growth of GDP is measured by excluding intermediate consumptions (production and resale), purely financial transactions and second-hand sales, which prevents double counting. To obtain an accurate value of economic growth, GDP needs to include the total output of expenditures and incomes.
Not all aspects of economic growth are positive, for example when an economy is at, or near its full capacity of productivity prices can be driven up causing inflation and the devaluing of their currency, where each unit of currency buys fewer goods and services that it previously could have. It can increase the
Economic growth refers to an increase in an economy’s productive capacity, as measured by changes in its real GDP (adjusted for inflation), over a period of time. Growth may be measured quarterly, annually, or year on year (changes from one quarter to the corresponding quarter the following year). Annual growth is used to identify trends in the business cycle, while quarterly growth provides an indication of the economy’s short-term direction, and year on year growth to show annual progress.
“Economic growth is the raise in price of the goods and services created by an economy.” (GDP Growth Definition, n.d., para1). It is measured by the percent rate of increase and calculated in real terms, for example: inflation- adjusted terms to net in the result of inflation on the price of the goods and services produced.
In general, the main cause for economic growth is the increase in mass demand. As the population demand for more goods and services, the more of it will be produced. Therefore, the demands will raise the level of real GDP (gross domestic product).
Assess the significance of three factors which might limit economic development in the developing countries.
FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)
Economic growth is a necessary but not sufficient condition of economic development. There is no single definition that encompasses all the aspects of economic development. The most comprehensive definition perhaps of economic development is the one given by Todaro: ‘Development is not purely an economic phenomenon but rather a multi – dimensional process involving reorganization and re orientation of the entire economic and social system. Development is a process of improving the quality of all human lives with three equally important aspects. These are: 1.
This can be measured by the following formula; Per capita nominal GDP = Nominal GDP / Population, Per capita real GDP = Real GDP / Population. Seven factors determine economic growth. Natural resources such as land, mineral deposits, waterways; climatic conditions provide an essential foundation to economic growth. Combined with the other resources of capital, labor and enterprises, natural resources can be developed and organized to increase the productive capacity if the nation. Consequently the quality and size of the labor force is a major determinant of economic growth. Education and vocational training are essential the growth potential of a nation. The promotion of education and job training schemes increase the knowledge, skills and flexibility of the workforce that contributes to potentially higher levels of productivity and efficiency. Whether from natural increase or immigration population growth can cause a higher level of economic growth. An increasing population requires increased public spending on housing, education and other social needs while businesses expectations of