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CAUSES OF ECONOMIC GROWTH - Coggle Diagram
CAUSES OF ECONOMIC GROWTH
Changes in:
quantity, quality or efficiency of the use of factors of production
state of technology
factor market flexibility
Depends on:
Resources
the more resources a country has, and the more effectively it uses its natural resources, the more it can grow
Technology
as technology improves, countries can use their existing resources more productively, new products and markets and be created and new production process can be developed
Capital goods
increase productivity and lead to a greater economic growth
Savings
enables investment by providing finds for firms to invest
Efficiency
bring about rises in output. This can be increased by competition and innovation
Taxation
more funds available for investment, R&D, training and generally improving the quantity and quality of resources employed
Labour
lead to economic growth. This can be done through increasing the participation rate, immigration, education and training
Government macroeconomic policies
should be aimed at promoting stability and economic growth