Answer to Question #304849 in Macroeconomics for GAyuni

Question

Explain both the meaning of economic growth and why it is considered to be an important objective for government. 

Apply relevant economic analysis to evaluate why it is argued that relying on economic growth itself is not a useful way of measuring real progress in advancing the well-being of society.

Consumer firm and government benefits, Advantages and disadvantages of economic growth

Answer 1

Economic growth is the increase in the amount of goods and services produced in a country per head of the population over time.

Economic growth is essential for the government as it results to increase jn revenue collected due to the increase in the living standards.

Consumer firm and government benefits

Measuring the economic growth is not an accurate determinant of measuring the advancement of well being of in the society because it averages all members of the society to be living the same life style. In real life, this is impossible and only a few people can contributing to the higher living standards

The federal and provincial governments are responsible for protecting consumer rights. The federal government is responsible for creating marketplaces that are fair, efficient and competitive for producers, traders and consumers.

Advantages and disadvantages of economic growth

Increased consumption. ...

Higher investment in public services. ...

Lower unemployment. ...

Possible inflation. ...

Current account deficit. ...

Environmental costs. ...

Income inequality. ...

Social costs of economic growth