Question

1. Why economic growth differs among countries?

2. Why productivity is considered to be the key determinant of a country’s standard of living?

3. List two factors that determine a country’s productivity.

4. List two policies that can influence a country’s its productivity and growth?

Answer 1

-Economic growth between nations is different. It is because of a number of reasons such as population, physical capital, human capital, technology, availability of resources, etc.

The most important thing is population. Some nations have low population rate while others have high population. For more population more resources are required to fulfil the needs of the people. Thus there is difference in economic growth among nations.

Other reason is technology. Technology helps a nation in producing more goods and services. Because countries have different levels of technology they are not able to produce at the same level and thus there is difference in the economic growth.

-Productivity is refered to as a key determinant of a country's standard of living because it leads to increase the standard of living of the people. If people are more productive they will be more efficient in their work and also produce more goods and services.

In developed countries the labor is more productive that is more educated, has better access to technology because of which they can produce more goods and services and thereby increase their standard of living.

-There are many factors that affect the level of productivity such as technical, production, organizational, finance, government, location, management, etc.

The two most important factors that determine productivity are technical factors and production factors.

Technology helps in increasing the productivity of the labor. With it the labor can produce more goods and services.

Production factors are also important as good management is required for allocating the productive resources efficiently.

-2 policies that can influence the growth and productivity of a country are-

1) the government can use fiscal policy by reducing taxes which will affect the consumption to rise. Investments will also increase and people will be able to earn more income as now they will have to pay less. This will increase the standard of living of the people and increase the productivity and growth.

2) improving the quality of education and training will also help in improving the productivity and growth of the economy. This is because people who are efficient will be able to use new technology better than people who are not well educated and untrained. So this will help in improving the productivity and growth of the nation.