Answer to Question #124015 in Macroeconomics for Remoneilwe

Question

Apply your knowledge of the drivers of economic growth and explain what can drive long run economic growth. Use graphs and models to explain what could get the drivers of economic growth going. Propose plans

Answer 1

Long run economic growth can be defined as the increase in the value of goods and services in the market of an economy over a given period of time. it is measured as the percentage rate of change in the real Gross Domestic Product (GDP)

The above graph shows labor's contribution to the long run economic growth of various countries at a given period.

1. Technological Change. it is defined as the change in a set of feasible production possibilities and the increase in output per capita of a given country over along period of time. it has the capacity to increase the amount of output an economy is able to to produce even if the inputs remain constant.

The above graph show the demographic changes in USA and Japan over a long period of time

Changing worker productivity. demographic factors greatly influence the quality and quantity of the available raw or natural materials. age structure also of a given country influences employment and long run growth.

Government activity. the government has a direct impact over long run growth and it operates through fiscal and monetary policy.