For instance, the values of coefficients of FDI and investment in Model 4 are 0.82 and 0.14 respectively. This indicates that 1 % increase in the share of FDI in GDP leads to 0.82% increase in LPG, and 1 % increase in share of physical investment in GDP leads to increase in LPG by 0.14%. It can be inferred, therefore that FDI encourages boosting of productivity growth than physical investment. It could be due to the direct role that multinational enterprises have on the production process of the local firms through both the forward and backward linkage effects. Multinationals do try to increase their profit by increasing efficiency of local firms through importing their capital, advanced technologies, marketing and managerial skills (Baldwin and Dhaliwal 2001; Baldwin and Gu 2005; Blomstrom and Kokko 1998; Globerman and Ries 1994; Rao and Tang 2005).
Thus, we know that economic growth in a country is strongly related with its productivity. The increasing of productivity will brings the increasing of economic growth. The increasing of productivity in a country means the ability to produce more goods and service with the same amount of inputs. Also, there are many indicators to determine the economic growth, such as high saving rates, high income (that will drive the higher GDP), and the number of employment. A country can be categorized to have an economic growth if they are having an improvement in terms of their productivity and the indicators that will determine the economic growth.
Economic growth may increase living standards of people living in the country . usually rich countries who are economically grown , people there tend to have better living standards – increased life expectancy , better health care , better education , etc . economic growth is usually measure by following methods : • Measuring GDP (Gross Domestic product ) – by measuring the GDP or total output of an country is high then it tend to be more economically grown. • Measuring Income or Per Capita Income – by measuring the income of the people of a country , economic growth can be measured . A country having high per capita income usually are more economically grown as people live with high living standards .
As demand decreases, the price would decrease and less money flow would be moving into the Treasury’s pocket. But this is not the real case at the moment, as the US Government is offering higher returns for USA bonds compared to other countries, especially those in the EU, such as Germany. The US dollar is seen as more stable than the Euro and many countries would rather buy US bonds. This in turn, increases price for bonds. Even with the recent sales of Chinese owned US bonds to stimulate the Chinese economy, economists are not worries demand for US bonds will decrease.
In comparison, a person with a higher level of income is likely to save this additional income rather than spend it. In other words, lower and middle income taxpayers have a higher marginal propensity to consume. This consumption (purchasing) of consumer goods is important, especially during economic slowdown, to spur economic activity. Therefore, increasing taxes for the wealthy instead of the middle class is favourable for the economy. Another argument refutes the claim that lower taxes for the rich encourage them to invest more which brings about economic growth.
Increased tax revenues allow the government in India to spend more on public services, such as infrastructure, education, healthcare and social welfare. Intentionally, resulting in superior public services. Moreover, the government in India can spend the money on protecting the environment. The higher real GDP of India enables a society to contribute more resources to encouraging recycling, reuse and the use of renewable resources. Nonetheless, India’s economic growth enhanced business confidence.
Technology advancement means that there are only less or lower cost inputs are required to produce goods and services. If the production cost is low, the profits at a given price will increase, so the producer will start to produce more to get more revenue. As the production of the economy increases, the supply curve shift to the right, which means that the supply increases and the price will fall (Boundless, 2016a). Therefore, the concept of improved technology shifts the PPF outward can drives the economy towards a higher level of productivity, thereby increasing economic growth and living
When firms are optimistic about the future, investment spending increases, and vice versa. Marginal efficiency on investment (MIE) also contributes to the volatility of investment spending in investment. MIE is the expected rate of return over cost of an additional unit of a capital good. When MIE increases, investment spending increases because firms believe that they will get a higher return
respectively during this period. The benefits of economic growth include higher incomes, increased tax revenue for government (which can then be spent on public services like education and healthcare), lower unemployment rate and investments which will encourage a virtuous cycle of economic growth. In order to achieve economic growth, solid and stable policies have to be implemented to maintain a conducive environment for a long term investment in the economy. It has to be constantly re-evaluated to adapt to changing challenges and global events over time. The three most used policies include Fiscal Policy,
In turn, as individual income, savings, and investment rise, more resources become available that can boost productivity. Problem: How the rapid growth rate of population globally impact on the environment? Discuss the challenges for sustainable development. Problem statement: The growing population is one of the rising global challenge and has direct impact on sustainability development. Today, the planet had already overloaded because of growing population and there is no doubt that human is the only contributor for environmental imbalances.