DEFINITION, BENEFITS AND FACORS AFFECTING ECONOMIC GROWTH

1. ECONOMIC GROWTH
Economic growth is the increase in the inflation-adjusted market value of the
goods and services produced by an economy over time. It is conventionally
measured as the percent rate of increase in real gross domestic product (GDP).
Benefits
•It raises a country’s overall standard of living.
•It enlarges the tax base, or the income and properties that may be taxed.
•It creates jobs and economic security for more people.
•It can benefit the economies of other countries through increased trade.
Factors affecting Economic Growth
•Investment in physical and human capital
•Technological Advances
•Institutional and policy changes that improve the efficiency of economic
organization.
a. Competitive Markets e. Political Stability
b. Stable Prices f. Secure property rights
c. Free Trade g. Flexible Capital Markets