As a consequent, production process improves leading to growth in aggregate output in the long run. He argues that the new technology can lead to increasing returns to all the input variables. Subsequently, Grossman and Helpman (1991) make important contributions to the work by Romer (1990). In their new model, R&D results in product innovation (i.e. invention of new goods) and consumers tend to consume more of a new product because they derive greater utility from them.
the scope of financial sector is more in countries were the interest rate is low. The Indian financial sector has a wide scope. India is undergoing rapid development. The infrastructure sector is under a developing pace. As the people prefer for an improved lifestyle and better infrastructure, the finance sector also grow rapidly.
According to Dogra (2011), there are many benefits in terms of economic growth to a country. Immigration is a process which increases consumers by a large percentage. Furthermore, it is very beneficial for companies to get profit and sell their products in their relevant field. In addition to it, more and more immigrant’s leads more sales taxes it helps to a country to boost their economy. Insurance is also a advantages thing as well as increasing loans, real estate taxes for a country.
According to Mankiw (2010), economic growth is one of the reasons why advanced countries have become richer and have improved standards of living. Economic growth has also attracted attention because of the positive impact it has on society, as it has been associated with benefits such as increased wealth and standards of living among others. However, economic growth has also had negative impacts on society. This premise shall discuss both the positive and negative impacts economic growth has had. 2.1 Positive Impacts of Economic Growth 1.
In other words, The more a country in terms of population is larger and more densely populated, The more tourism demand will be, because population increase pave the way to providing expertise in the provision of tourism services and also in the populous countries such as India and china we will see the attraction of more ethnicities because of variety of costumes. According to the results the effect of the population has a positive impact on demand for tourists’ arrivals. If the population increases 1%, the tourist incoming revenue increases 1.1%. So that the travel incentive to these is due to benefit from tourism services, especially hotel services, leisure and entertainment. The results also showed a significant and positive relationship between the real effective exchange rate and incoming tourism revenue.
Economic growth is main factor in individual lifestyle in and economy so if there is growth, reduction of poor living standards will occur. These enhances consumer spending because it increases incomes. An increase in workers real wage rates will result higher purchasing power of a worker and therefore these workers who are also consumers tend to increase their spending, which causes a rise in aggregate demand and aggregate supply in a long run, because there is an increases in aggregate demand and aggregate supply over time it results to growth in output from firms and therefore firms need to employ more workers for continuous expansion and as a result reducing unemployment. A rise in output will also result to improved and more efficient public services as consumer real wage rates increases so does direct taxes, which results to growth in tax revenues government can increase spending on education and health. With all these in place firms become more confident and are able to achieve product efficiency even with even market conditions and so they invest more, and as stated in the first part of this essay investments is a main source of economic
Economic Growth: “Economic growth is how much more the economy produces than it did before. If the economy is producing more, businesses are more profitable, and stock prices rise. That gives company’s capital to invest and hire more employees. As more jobs are created, incomes rise. Consumers have more money to buy additional products and services, driving higher
In consequence, there were some technological advances that were necessary and that finally reduced the costs of transportation and communication. With the ease of entry of imported products in the country, there was an increase in supply and improved the quality of national products. Thus, imported products became cheaper and nationals had a improves. Besides being a great enabler source of jobs. According to Intriligator (2003) other important advantage is that companies are able to increase their size to multinational and international level.
This meant that the goods produced in the country could be exported and the producers could earn greater profits. However, at the same time there is a large influx of goods from other countries. In order to keep pace with the growing competition, more goods had to be exported rather than imported. Cheap labour and technology hence became the most sought after solution for producing large amount of goods at a cheaper and faster pace. Large firms, in order to maximize their
India is a developing nation and is witnessing a process of rapid urbanization. More and more rural areas are getting urbanized due to financial and technological growth. The urban areas thus have higher standards of life than the rural areas due to more opportunities and facilities available. Urbanization is a modus operandi associated with the escalation in level of economic development. The prevalence of industrialization has a chain effect of increasing employment and higher wages which leads to increase in disposable income of the people.