Question

What are key policies to achieve high levels of growth? Create an argument referring to the 4 elements of the production function.

Answer 1

Capital ,land ,labor and entrepreneur are four factors of production.Various combinations of four factors of production are used to achieve economic profit. Only if we increase the quality and quantity of this factors of production,economic growth will take place.

Land: is an important factor of production.Any natural resources such as oil,gas etc can be included under the land. Good quality of land helps in the economy growth.For example US is one of the largest exporter and producer of grains due to their good quality land.
These resources plays an important role in the growth of the economy.These four factors of production are the building blocks required for the economic growth.Efficiency of production of goods and services in an economy is very important for the economic growth to take place.As per Gross Domestic Product( GDP) an increase in production will lead to economic growth.

Labor:includes the people who are responsible for the production of goods and services.Good quality of labor is important for the efficient production of goods and services.Skilled labor force is very important for an economy to grow.

Capital :Capital goods are required in an economy to increase investments.These goods are the machineries or tools required in the production process.Increase in capital goods will increase the productive capacity of the economy which in turn increases the economic growth.

Entrepreneurs:The are innovators behind the production process and combine all the factors of production to produce a new good or service.

Thus good quality and quantity of factors of production is a key factor for economic growth.

In addition to the key four elements of factors of production discussed above technological progress also plays an important role in the economic growth.Technological advancements will increase productivity and efficiency.By technological advancements standard of living of people will also increase and thus the economic growth.