Knowing What Is Economic Growth
When there is a change that takes place in the quantity of production of goods and services by a particular country which happens in a positive direction and within the given time period it is defined as ´Economic Growth’. The economic growth of one sector is neither uniform nor exactly the same when compared to the other sectors which make this an important characteristic. We can consider an example to explain this, that is, suppose if a country’s corporate sector might have done remarkable contribution to the economic growth and on the other hand, the telecommunication sector might have performed in an average and not contributed much in economic growth of the country. In the above example, the telecommunication sector will be given more attention.
The Gross National Product of the country and its economic growth are directly proportional to each other which means, if there is an increase in the percentage of gross national product, then there is an increase in the economic growth of the country. To be specific we can say that the economic growth increases of there are an increase in the per capita national output or even the net national product of that country. However, these will constant or supported for a lot of years.
If a country wants to achieve economic growth its rate of increase in per capita national output should be greater than the increase in the population of that country. One example of the year 2005-2006, in India, the increase of GNP was 9.1% whereas the increase in the population rate was 1.7 %. So here the increase in the Gross National Products per capita will be 9.1-1.7=7.4, which is a 7.4% increase. If both the increase in total output and population growth have the same percentage, then the actual growth will be zero, which means that there has been a decrease in the rate of per capita income of the country. Just like how trading using wrong software will make your account balance zero continue reading.
If the rate of per capita income is decreased it will result in negative economic growth, means there will be no economic growth, hence, there will be no improvement in the standard of living of the population even if there is an increase in the total output of the country. But this is considered as a better idea than having a stagnant economic condition.
There are several factors that will affect the economic growth of the country as if the government body alters the expenditures or country is not trading properly. The economic growth is greatly affected when there is a sudden hike in the prices of the goods and services.