Explain how economic growth is different from economic development and whether economic growth is always beneficial to a country. [12 Marks]

 

Economic growth is the growth of goods and services that are produced by an economy or a nation, which is considered for a specific duration of time which is measured through GDP or GDI. The growth in a country's production of goods and services is steady and continuous. It can be triggered by an improvement in the quality of technological improvements, education or in any way as long as there is added value in goods and services being produced by any sector of the economy. On the other hand, we have that economic development is the mechanism that focuses on economic growth, both quantitatively and qualitatively. This keeps track of all the aspects of a country's people being healthier, wealthier, having greater access to good housing and being more educated. In that case economic development could create more opportunities in the fields of education, housing, healthcare and environmental conservation. This shows an increase in every citizen's per capita income.

Economic growth is very beneficial because it is the means by which we a country can improve the quality standards of living, how a government can create higher tax revenues and reduce government borrowing. More so, economic growth play a a key role in reducing debt toe GDP ratios. Despite all this benefits, economic growth is not always beneficial to a country. This is because economic growth often leads o increased inequality because growth benefits the richer more because they onw assets and have the best-paying job. And result to income inequality.

Economic growth could lead to current account deficit. That is if there is an increase in economic growth there would be a balance of payment problem. If there is increase consumer spending which leads to an increase in imports and the exports fail to increase. This shows that economic growth is not always beneficial to a country.

Step-by-step explanation

Economic growth is the growth of goods and services that are produced by an economy or a nation, which is considered for a specific duration of time which is measured through GDP or GDI. The growth in a country's production of goods and services is steady and continuous. It can be triggered by an improvement in the quality of technological improvements, education or in any way as long as there is added value in goods and services being produced by any sector of the economy. On the other hand, we have that economic development is the mechanism that focuses on economic growth, both quantitatively and qualitatively. This keeps track of all the aspects of a country's people being healthier, wealthier, having greater access to good housing and being more educated. In that case economic development could create more opportunities in the fields of education, housing, healthcare and environmental conservation. This shows an increase in every citizen's per capita income.

Economic growth is very beneficial because it is the means by which we a country can improve the quality standards of living, how a government can create higher tax revenues and reduce government borrowing. More so, economic growth play a a key role in reducing debt toe GDP ratios. Despite all this benefits, economic growth is not always beneficial to a country. This is because economic growth often leads o increased inequality because growth benefits the richer more because they onw assets and have the best-paying job. And result to income inequality.

Economic growth could lead to current account deficit. That is if there is an increase in economic growth there would be a balance of payment problem. If there is increase consumer spending which leads to an increase in imports and the exports fail to increase. More so, we have that economic growth can lead to increased pollution which may lead to environmental costs. This shows that economic growth is not always beneficial to a country.