Question

Part 1

Consider a nation in which the volume of goods and services is growing by 5% per year:

Analyze the impact of the high rate of growth on the nation.

Explain how the high rate of growth is likely to affect the power and influence of the nation's government relative to other nations experiencing slower rates of growth.

Explain how the 5% growth is likely to affect the nation's living standards.

How does economic growth affect population growth?

Will living standards necessarily grow by 5%, given population growth?

Answer 1

1. impact of the high rate of growth on the nation

• more GDP (Gross domestic Products) in the nation, giving country more economic stability
• More employment, or fall in unemployment due to more people employed to produce for the increase in production
• Better living standards due to more varities in goods being produced
• Yet demand pull inflation may occur due to more goods/services being consumed

2.high rate of growth is likely to affect the power and influence of the nation's government relative to other nations experiencing slower rates of growth

• Higher negotiation power for trade and other deals
• more economic stability giving political power for the nation for bargaining, import and export decisions and international trade
• Ability to secure good investments and FDI, and hot moeny flows to the economic stability which will contribute to financial stablity

3. how the 5% growth is likely to affect the nation's living standards

• Improved living standards due to more goods and services being accessible, without having the need for imports
• As more employment occurs, higher wages will enable these families to enjoy better living standards
• More skills will enable them to secure better jobs (more skills due to better education and so forth)

4. economic growth affect population growth

More goods and services produced will mean more healthcare and better foods being produced

This wil contribute to healthly lifestyles

Birth rates will rise as less babies die at birth

Ageing population will rise die to better medical facilities

Therefore overall population will rise

5. Will living standards necessarily grow by 5%, given population growth

Yes;

• due to above mentioned

No :

• because it depends on the type and qaulity of goods produced, and who consumes the good
  • if goods like weapons are produced that controbute to higher GDP, then there is no postive impact for the economy, more likely for external costs
  • If good qaulity goods are all exported, domestic consumers will suffer from cheap alternatives
  • if only cheap goods are produced with poor qaulity, unlikely for better living standards to arise