Sources of Economic Growth Increase
Economic growth (Economic Growth) is the development of activities in the economy which causes goods and services produced within the community increase and prosperity of the community increased. Problems of economic growth can be seen as a macroeconomic problem in the long run. The development of the ability to produce goods and services as a result of these factors increase
production in general is not always followed by the increase of production of goods and services of the same magnitude. Added the potential to produce is often greater than the actual production accretion. Thus economic growth is slower than its potential.
Sources of Economic Growth Increase
Economic growth is generally defined as an increase in per ca pita GDP rill. Gross Domestic Product (Gross Domestic Product, GDP) is the market value of a country’s total output, which is the market value of all final goods and services produced over a given period by factors of production located within a state.
The increase in GDP can arise through:
1. The increase in labor supply
Increased labor supply can produce more output. If the stock of fixed capital rose while labor, new labor tends to be less productive than the old labor.
2. The increase in physical capital or human resources
Increase in capital stock may also increase the output, even if not accompanied by a rise in labor force. Both physical capital raise the productivity of labor and provide valuable services directly. Investment in human capital is another source of economic growth.