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What Causes An Economy To Grow?

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What Causes An Economy To Grow?

Postby Hernan » Fri Oct 06, 2017 2:30 pm

there are a lot of things that may cause the economy to grow, but here are a few ideas:

-low taxes - gives households and firms incentive to achieve as their gains will be taxed less. seeing a greater harvest from work usually motivates people to work harder

-low economic regulation - makes it easier for firms to grow enterprise to develop (if you want to know more about this, try googling the removal of price caps)

-increased government spending or government injections into the economy - for example the government providing funding to build a community centre, it will create employment and a source of revenue as the community centre could put on classes which people pay for. Also, building a new bridge for example would also create employment for contractors, builders, engineers and architects to name a few.These people will now have an increased income and be able to spend more on goods and services. as more peoples income increase and they have more disposable income, this allows them to spend more, and eventually may lead to an increase in GDP.

-Innovation - the discovery and development of new technology. take the electronic tablet industry for example, leading technology companies like sony and apple among others are constantly releasing new versions of their tablets, each containing a new technology, as they try and beat their competitors on having the most up to date product. this in turn makes people want to have the most up to date technology so every time a new tablet is brought out, everyone wants to buy it. this is also evident in within the smartphone industry, since 2007 we have had at least 5 new iphone models, iphone, iphone 3G, iphone 4, iphone 4S, iphone 5 and im pretty sure i have missed some. thats over 1 new model per year!

aaaand thats all i could think of off the top of my head...i hope this helps!
Hernan
 
Posts: 14
Joined: Wed Jan 15, 2014 10:41 pm

What Causes An Economy To Grow?

Postby Lachlan » Tue Oct 17, 2017 2:07 am

Unfettered Capitalism, and minimal taxation.
HTH
Lachlan
 
Posts: 23
Joined: Tue Jan 07, 2014 12:16 am


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