Edexcel A Level Economics A:復(fù)習(xí)筆記2.5.4 The Impact of Economic Growth
Benefits & Costs of Economic Growth
- Economic growth?is considered to be the main contributor to an improvement in the?standards of living
- Due to the?negative aspects?of economic growth, there is much controversy about maintaining it as a central?macroeconomic aim
- Instead, arguments for a focus on?societal well-being?are gaining traction
A Table Summarising the Benefits & Costs of Economic Growth
| Benefits of Economic Growth | Costs of Economic Growth |
| Increased incomes?lead to better standards of living | Rising aggregate demand causes?demand pull inflation;?purchasing power?of people on fixed incomes may fall |
| Decreased levels of absolute poverty | Lack of equity?in the distribution of income - the rich may get richer and the poor poorer |
| Improvement in the quality/quantity of environmentally friendly technologies | Environmental damage caused by?negative externalities of production |
| Higher sales revenue for firms and greater profits | Increased inflation?can harm export sales |
| Increased investment?by firms increases the potential output of the economy | Decreased export sales may lead to a delay in investment?by firms |
| Reduced expenditure by governments on benefits | Increased income usually leads to?greater consumption of demerit goods |
| Higher government tax revenue?due to rising incomes and surging?corporate profits | Greater output often requires?more time from workers?and can decrease leisure time and?well-being |
| Increased employment resolves some of the negative social impacts of unemployment |
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