Answered: What factors contribute the most to…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions

Section: Chapter Questions

Problem 6QP

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What factors contribute the most to economic growth?

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

Expert Solution

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To manufacture goods and services, you'll need resources. However, in terms of the demands and desires of enterprises and individuals, the economic resources available to meet them are limited and thus vulnerable to scarcity. To optimize production, you must use resources as efficiently as possible. People rely on three essential components known as "factors of production": land, labor, and capital to produce what they want. To account for human wealth or entrepreneurial activity, economists might include a fourth or fifth element.