Question

What are the limits to the U.S. long-term economic growth? Is there anything that our government can do to address these limits, or would it be a bad idea to try? 250 words maximum

Answer 1

a.Limits to U.S. long-term economic growth

The limits to U.S. long-term economic growth are;

i. Capital- This includes human and physical capital. Human capital refers to when a worker's skills and knowledge are increased for a job through education and on-the-job training.

ii. Technological knowledge-This refers to when the inputs are put together to produce the goods and services. The increase in technology results in an increase in economic growth.

iii. Infrastructure-Infrastructure in this context refers to the laws, policies, socio-economic institutions, and cultural attitudes that generate long-term economic growth.

iv. Natural resources-Natural resources are an important limit in sustaining economic growth. The technology advancements have eliminated or reduced the productive process for commodities. When the scarcity of a natural resource increases; the market price and the economic incentives to find a less costly alternative also increases

b. What the government can do to address the limits

The government can do the following to address the limits

i. It can improve capital by promoting education and training the workforce to acquire the various relevant skills required.

ii. Also, the government can address the resources issue by allowing skilled immigration of workers and reducing restrictions on locating natural resources (reduce bans on drilling for oil, for example).

iii. In addition, the government can encourage technology improvements by ensuring patent protection, and tax credits for research and development.

c. It won't be a bad idea to try eliminating these limits because by trying, the government might find a solution to some or all of the limits thus boosting the economic growth of the nation.

Explanation:

Economic growth is explained as an increase in the output of a nation in terms of the production of its goods and services.