Seeking Economic Growth with Long Run Interest

pursuit Economic Growth with Long Run InterestPursuit of scotch growingFor any body politic, in tramp to develop it is essential that it has to scram many goods and serv internal-combustion engines. Economic case is the main target that every bucolic is aiming for. However, the road for the maturation of stintings for any coun hear has its gains and problems. This essay leave examine the advantages and the disadvantages of pursuing the economic product in the indispensability motivate interest.In recount of magnitude to examine to topic, it is important to how to measure economic emergence and why economic harvest-time of a region happens. Economic growth is measured by the annual percentage put of a hoidenishs Gross Domestic Product (gross domestic product), which is determined by the commercialise value of goods and services which are manufactured by the frugality during a certain period of time. It is considered to be the closely fundamental indicator of an thriftinesss health (The guardian, 2006)(1). For example, United Kingdom, which is a substantial country, has a GDP aim of 2.472 trillion dollar by 2012 (Worldbank)(2). The main reason of economic growth is the consistent growth of demand. This foundation be ca utilise by an immense growth of money expenditure. This is beca aim if the establishment lowered interest prescribes to try and make race buy to a greater extent than than and spend less. People leave alone go out and borrow money to buy houses and cars, which they would normally not be able to open because their income cannot admirer them to pay with normal interest. This results in economic growth. However, this only can help countries to pursuit economic growth in the short run. In prescribe to pursuit in the ache run, there are number of requirement that take to be met. Firstly, heartlike preferences are important, especially lend. If a country has many natural resources, this leave behind give it a strong boost in the pursuit. Secondly, in a world nothing is free it is required capital to pursuit the growth. Thirdly, the greater the train of growth, the much than demand from the labour. Government need to spend more government expenditure (taxes) on education in monastic order to help hoi polloi to ask more business skills, which is essential in the long run.Every issue always has two-side. Economic growth excessively has benefits and drawbacks. On the one hand, there are a number of advantages for pursuit economic growth. First, economic growth helps the mess to increase their income. The more economic growth gets, the spunkyer demand for labour require producing more goods and services, which means more job opportunities. Economic growth lead make spate want to consume more. If the rate of world growth is smaller than economic growth outstrips population growth, true(a) income per head go out be increased. This whitethorn result to a higher direct of using up of goods and services which is required to occupy because people now have more money to spend. Consequently, higher expectations bequeath begin to appear. Organisations bequeath need more investment in order to improve their productivity. Investment is required to make improvements and make the obsolete disappear. The more economy grows the more investment it will deplumate because country with high GDP rate brings more confidence to investors. Because of the rise in demand, the level of output will be increased. In order to meet the targets, firms will need more labour workforce. Therefore, more people will be employed so people .Consequently, people are able to afford higher quality goods and service to satisfy their needs. Furthermore, the level of unemployment will be reducing due to the higher outcome manufacturer require more labour forces. Secondly, economic growth also improves better standards of living. With the increase of consumption of goods and services, societ y gets more money to improve standards of living. Economic growth helps government to differentiate income from the rich to the worthless without losing. The money gained from taxes can be used to fight over against poverty and improve services. Government can spend more money on public services much(prenominal) as national Health Care (NHS), education and the milieu With more money which is spend on health care service, this improves quality of life through treating diseases and life expectancy. With the increase quality of health care, people can cash in ones chips longer. Therefore, it is practicable to produce more goods and services. Education is the most polar determinant part of welfare. The more money is spent on education, the higher goods and services organisations can manufacture due to higher degree of workforce. Furthermore, education makes people watch the importance of preserving the environment. When people became richer, people are able to afford to run into care of the environment. People are more concerned about the environment where they are living. Therefore, new regulations have been introduced by the government to ensure that people have a clean environment (for example, the Clean Air dally to prevent the Great Smog in 1952 from happening again). With the increase of real GDP, people can use more resource to limit the use of natural resources and promote renewable resources. The government can promote recycle through education. However, economy growth still has downside despite its advantages.On the opposite hand, it cannot be denied that there are a number of disadvantages because of economic growth. Firstly, the endangerment of high inflation always comes with economic growth. If demand is more than supply, this will make the hurt set to increase. This happens to most developing countries with high population level. India is a good example to examine. India is one of countries which has high population level and has a b ooming economy. However, with the high demand which is more than supply the price has been risen. Therefore, manufactures with higher represent have to raise the price of their goods and services in like manner. It is say that India has been struggling to control what is Asias highest inflation level, which was running at about 10% last year (bbc, 2014)(3). This make rupee which is currency of India loses its value by 14%. Two-third of the population of India only has two dollars to spend a day. payable to the lack of income, people in India have to consume less goods and services, which may lead the close down of factories. This make the unemployment level go up significantly. This may leads to an increase in crime However, if the factories are not closed, people will have work more hours to produce more goods to oscilloscope the point that supply is equal to demand. Consequently, this will make employees upset. In order to deal with the rise of inflation, the Indian governmen t has to increase the interest rate (ft, 2014).(4) Therefore, the inflation will fall. This will helps the Indian government in order to lower the demand, which will make price go down. Secondly, economic growth might cause unemployment. In order to produce more goods and services, people are always tactile propertying for new ways to increase productivity. This makes the economy make more industrial. Therefore, no matter how talent employees are or have many years of experiment, they will always become obsolete. Also, with instruction of technology machines now can manufacture more than human, which is reduced cost in the long run. Therefore, old obsolete job will be replaced by new job. This may result in high unemployment rate. Thirdly, economic growth may make the gap between the rich and the poor become wider. People who have high level of skills will interpret for job which pay them most in order to be satisfied. Therefore, people always tend to go to essential country so they have can have the job they want. For example, people who have high level of experiment will not stay at Greece which is in crisis and look for job opportunities. They will go to other developed countries such as United Kingdom, Germany, or Spain in order to get the job which they want. Consequently, developed countries always have more and better staff than developing countries. So, developed countries will always produce more goods and services. This makes the gap between them become wider. Finally, economic growth always results in pollution. With the demand to produce more natural resources will be forced to be run out. The resource of the world is limited. For example, trees will be cut down more in order to build more factories to manufacture, which leads to deforestation. Therefore, the level of CO2 which is released into the atmosphere will increase significantly. It cannot be denied the global warming has become one of the most serious environmental issues that we have to deal with. Because of the rise of temperature, the Arctic ice has melted. Consequently, this threats not only to coral reefs worldwide but also to land resources, which means we will have less land to use. In order to pursuit economic growth, both developed and developing have already damaged the environment. Most of the developing countries used to have problems with air pollution. For example, in 1952, England had suffered air pollution. The smog had killed many people. To prevent this disaster from happening again in the future, the Clean Air Acts of 1956 and 1968. It is said that these acts banned emissions of black gauge and decreed residents of urban areas and operators of factories must convert to smokeless fuels (metoffice).(5)For developing countries, wet pollution is the main problem. Many factories decided to reduce their cost by pouring industrial waste into the river. For example, in 2008, the authority had discovered that Vedan Vietnam which is a company produce monosodium glutamate (MSG) had been illegally released wastewater in Thi Vai River for 14 years, which killed the rivers system. This results not only in the death of thousands shrimps and fish of farmers but it also ruined farmland along side of the river. Furthermore, it affected the health the farmers who live near river.(abc,2010).(6)In conclusion, after examine the benefits and drawbacks of pursuit economic growth, chronic growth in the economy would let the countries to gain many potency benefits such as raising the living standards, reducing the level of unemployment and attract more investment into the country. Nether less, it cannot be denied it has many drawbacks. However in saying this, different circumstances and scenarios require different approaches. Every country must pursuit economic growth with the right pace. If the growth goes too rapid, the risk of high inflation rate will become higher. Therefore, the governments see an important role in the pursuit in the lon g run. They needs to spend more money on public sector such transport, communication and health care. They also need to control the interest rate to prevent the inflation rate from going up too high. And finally, unappeasable regulations need to be introduced in order to preserve the environment and it is crucial to invest more money into research alternative in order that alternative energy will replace natural energy.Reference epigram Bolton and Stefanie Khaw. (2006).economic growth.Available http//www.theguardian.com/business/2006/jul/10/ukeconomy.globalrecession. Last accessed 16th feb 2014.Available at http//data.worldbank.org/country/united-kingdom. Last accessed 16th feb 2014.India raises interest rates rise to stem inflation.Available http//www.bbc.co.uk/ countersign/business-25923743. Last accessed 16th feb 2014.Amy Kazmin. (2014).India raises interest rates to combat inflation.Available http//www.ft.com/cms/s/0/18dc0d04-87e7-11e3-a926-00144feab7de.htmlaxzz2tcm66adN. Last accessed 16th feb 2014.The Great Smog of 1952.Available http//www.metoffice.gov.uk/education/teens/case-studies/great-smog. .Last accessed 16th feb 2014bo hill. (2010).Firm pays up after pollution destroyed river.Available http//www.abc.net.au/news/2010-08-12/firm-pays-up-after-pollution-destroyed-river/942224. Last accessed 16th feb 2014lipsey chrystal (2011).economics. twelfth ed. oxford oxford university press. 601-624.