Question

What are the determinants of economic growth as they relate to productivity? Explain each one of them and why they are so important. Which seems to be the most important and why? How did China expand so quickly? Can China continue to experience rapid economic growth or has it already started to slow down? What is the impact of a potential slowdown in the Chinese economy on the United States and the global economy?

Answer 1

The main four determinants of economic growth as they relate to productivity are natural resources, physical capital, human capital, and technology.

(a) Natural resources: If a country has abandon natural resources and they can use it efficiently then economic growth rises.

(b) Physical capital: It includes the plant and machinery. If the country has advanced plants and machinery which helps out producing more goods will increase economic growth.

(c) Human capital: It includes both skilled and unskilled workforce. An increase in the quantity and quality of the workforce leads to an increase in economic growth.

(d) Technology: It means the methods and techniques used to produce goods. Inventing new technology or updating old technology will help in an increase in economic growth.

Human Capital is the most important factor because, with a more skilled workforce, the country can have new inventions in technology. Also with skilled human resources, productivity will also increase.

China's rise came from the manufacturing sector. New technology and increased labor efficiency lead to the economic growth of China. There are many manufacturing units in China with cheap rates that attract foreigners to invest in China.

Yes, China's economy will rise in recent years until it reaches stagnation point.

If Chin's economy slows down then the world market will also be affected. Most of the manufacturing units are based in China. Also, globalization has connected every economy, so a fall in China's economy will impact every country.

Please Thumbs Up! thanks.