Question

• Identify the factors that affect long-run economic growth.
• Discuss a United States policy (or policies) designed to improve each of the factors you identified.

Answer 1

in the long run economic growth is affected by various factors.these can be studied as below-

NATURAL RESOURCES AND THEIR UTILIZATION-

the availability of natural resources are a nature's blessing but more important is whether the country making the optimum utilization of resources or not? therefore natural resources and optimum utilization of natural resources without harming the nature and achieving the sustainable goal would be more important concept in long run development.

• USA is very sensitive towards nature's protection and therefore it established- EPA ( Environmental protection agency) which generally formulates the policy to prevent the nature and its resources

SKILLED ABLE AND EFFICIENT HUMAN RESOURCE-

human resource is the main asset of a country , but what more important is that whether the country is developing this nature's gift or not. it implies that if government of a country is making investment in human capital like providing education,medical facilities, skill development opportunities or not. if these amenities are not provided to the human beings then surely in long run the human capital would become a burden over the government and nation , if such services are provided then the population would contribute in the nation's growth.

• USA is concerned with American education system and overall development in human capital.USA generally spend a huge amount of GDP to its education sector to develop the skills of its human wealth.

FINANCIAL SECTOR -

financial sector in the economy is a vital role in the economy.if credit availability,effective banking services would be favorable then it would become easy to arise capital for business and if not then it won't be easy for business man to start business in the economy.

• USA is world's largest economy and this is achieved by it because of its effective fiscal and monetary policy. USA's central bank (federal reserve) provide guidelines concerned with Basel norms which encourage business and capital adequacy in the economy.
• it has implemented and created many effective fiscal policy concerned with taxation,competition and concern with various business dealings.

REACTION TOWARD TECHNOLOGY-

technology and innovative manner of production are the core of any economy. if a nation is technology friendly and easily adapts the newer technology and innovative ideas then surely it would be beneficial for the country in the long run.

• USA is the technological giant, fromm major internet search engines to best kind of computers,mobiles and tablets all are made in the USA. it provides employment not only Americans but to people from all around the world.it spent huge amount on technological research and development.
• it prepared policy of innovation which reduces the pollution and it emphasis on the use of green energy.

POLITICAL STABILITY-

if the government and political sector is stable then it would be beneficial for the firm and would generate confidence among producer to take decisions with various concerns.if the political sector is not stable then there would be conflict in the policy making and then the businessmen would get discouraged.

• USA Government have been very efficient in policy making and implementing them.in the past we can also observe that it has sound relations with the foreign countries.