Question

The economy of a country has been growing at an annual rate of 8%. Determine the cause and effects of the economic growth in this country

Answer 1

Answer:

The correct answer is:

• Cause of Economic Growth: investment in human capital, investment in physical capital

• Effect of Economic Growth: improvement in standard of living, social and community development

Explanation:

For economic growth to take place in a country there is no other option for that nation but investing. While investing in human capital will raise the literacy rate of its population, investing in physical capital will increase the production and quality of the manufacturing. This last will lead to more revenues which should improve the quality of life of the people in that country or, in all cases, could help to create more social programs for community development.

Answer 2

Cause of Economic Growth                  Effect of Economic Growth

Investment in Physical Capital             Social and Community Development
Investment in human capital                Improvement in Standard of Living

Economic growth can be seen in different components such as efficient labor, physical capital, and intensive growth.