Question

1. Explain in detail how countries can grow their economy.

Please provide examples and show references.

2. If a country is experiencing high rates of unemployment, what are some things government or other agencies can do to attempt to reverse the trend and why?

Please provide examples and show references.

Answer 1

[1.]

Economic growth of a country is a multidimensional concept. There are numbers of factors which enable the country to grow their economy. Some of the important factors, which stimulate the economic activities in the economy and thereby allow a country to grow their economy.

Improve infrastructure :

If a country improve its infrastructure facilities such as Roads, Ports, bridges, Railways, Waterways and Highways. These infrastructure is very essential for countries to grow their economy. As these infrastructure facilities play important role in Production, transportation and employment. Therefore, improved infrastructure of a country is very essential for countries to grow their economy.

e.g. The growth of Japan economy is very much derived from its highly improved infrastructure facilities.

Improve Technological level :

Improved technological level enables the country to utilize its available endowment of resources more efficiently. With advanced level of technology a country can Produce more, Export more and thereby Growth more. Therefore, improved/ Advanced technologies is very essential for countries to grow their economy.

e.g. US, Japan and germany improved their technological level over period of time, which allow these countries to grow more efficiently with its available endowment of resources.

Large Government Expenditure:

When government increases its expenditure, it stimulate the production and consumption activities in the economy. Increased government expenditure increase the aggregate demand (AD) in the economy which increase the output level in the economy and thereby, GDP of a country grow. Therefore, government expenditure is essential for the countries to grow their economy.

e.g. government can increase its expenditure by providing better infrastructural facilities. This would ultimately increase the employment opportunities in the country.

[2.]

If a country is experiencing high rates of unemployment, There are some things government or other agencies can do to attempt to reverse the trend. Some of them are:

Human Capital:

Human capital is not same as the general population of the country instead its Human capital refers to a worker who is skilled in their respective field. A worker who has sufficient education, who can operate sophisticated machinery and who has adequate experience. Therefore, Human capital is essential for country who experiencing high rates of unemployment. Human capital increase the employment opportunities in the country.

e.g switzerland, finland, norway, canada and japan are some the countries who has high rank in human capital index.

Stimulate aggregate demand in the Economy

Government or other agencies can take measures such as increased Government expenditure, polices to promote productive investment in the economy and adjust the taxation structure which improve the purchasing power of lower income segment of the economy. It increase the production and thereby, provide employment opportunities in the country.

Reform Existing Tax structure:

When a country is experiencing high rates of unemployment, it become very essential to keep maintain various economic activities in the economy to generate employment opportunities.If the tax rate is so high, in the situation of high rates of unemployment it become very difficult to stimulate the consumption power of the country. If consumers does not consume more, there will be low level of production and thereby, unemployment rate increases further. Therefore, it become essential for a country who is experiencing high rates of unemployment, to reform its Existing Tax structure.