Question

1. Can economic growth last forever?

2. What are the main limits to economic growth?

3. Does prosperity require economic growth?

Answer 1

1.

Economic growth can last forever, though within the limitations. Economic growth can take place with increase level of technological developments, new inventions and innovation at work. It helps in building capabilities, increasing resource utilization efficiency and increasing productivity as well. So, long run potential output keeps increasing and economic growth follows to reach to that level of long run potential output level. Though, rate of economic growth, will decrease over a period of time and achieve a steady state of economic growth.

==

2.

Main limits of economic growth are the scarcity of resources available to the economy, limitations in technological development, rate of depreciation that can reduce the available capital to be used, government policies and market demand. Economy can achieve its economic growth, provided it has the resources and technologies to build new capabilities. If not, then economic growth will be limited.

==

3.

Prosperity requires economic growth, but it is one of the many factors that bring prosperity. When economic growth is complemented by equity in income distribution, presence of cheap health care to increase quality of life and good government policy to alleviate poverty among the others, then prosperity takes place. Hence, only economic growth has a limited impact upon prosperity.