"The costs of a faster rate of economic

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Edward Amoroso

“The costs of a faster rate of economic growth in the UK would exceed the benefits.” Discuss.

Economic growth is a sustained increase in total output or output per person for an economy over a period of time. For economic growth to be achieved, there must be an increase in either the quantity and/or the quality of resources. Economic growth usually occurs when there is a change some of the factors of production. The land can be utilised better with technological advances, and these can improve the company’s output, causing economic growth. The size and quality of the labour force may increase. Among the possible causes of a rise in the sizes of the labour force are immigration, a rise in the retirement age and more lone parents entering the labour force. The two main causes of a rise in the quality of the labour force are improvements in education and training, a more educated and better-trained labour force will increase productivity. When a company invests in more capital this is used to help the company to advance, and would cause economic growth.

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The productive capacity of most economies increases each year. In industrialised economies this is due mainly to improvements in educational standards and advances in technology. In some developing economies it is also due to rises in the size of the labour force. We can predict how much the economy will rise. This is called the trend growth. The trend growth is the expected increase in potential output over time and is a measure of how fast the economy can grow without generating higher inflation. In the United Kingdom’s macroeconomic objectives, economic growth is desired. The government has a target ...

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