Please list the 4 key supply-side growth factors we discussed and discuss their viability (do-ability) in terms of getting our economy growing again, given that today our economy is not growing.The issue of viability – if the economy is growing slowly or not at all, do we have any chance of achieving success with each of the 4 growth factors? What will likely cause us problems?  What approaches could we use to increase our odds of success? You need to think carefully about this one.

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Asked Dec 2, 2019
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  1. Please list the 4 key supply-side growth factors we discussed and discuss their viability (do-ability) in terms of getting our economy growing again, given that today our economy is not growing.
  • The issue of viability – if the economy is growing slowly or not at all, do we have any chance of achieving success with each of the 4 growth factors? What will likely cause us problems?  What approaches could we use to increase our odds of success? You need to think carefully about this one.
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Expert Answer

Step 1

a.

The four important supply-side economic variables that indicate the economic growth are the Unemployment rate, Economic growth rate, Trade and Balance of Payments, Inflation rate. They can be explained as follows:

  1. Lower Unemployment: When the unemployment rate is lower, the economy will be close to the natural rate of unemployment which means that the economy is successful in eliminating the structural as well as the frictional unemployment in the economy. This helps to reduce the natural rate of unemployment that indicates the increased economic growth and development of the economy.

 

  1. Economic growth rate: The economic growth rate indicates the rate at which an economy grows in a given period of time. When the economy is performing well in the financial year, it will have substantial economic growth rate compared to the previous period. Thus, the improved economic growth rate in the economy is a supply side growt...

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