Chinese Economic Growth Essay
Chinese Economic Growth
1, Explain what is meant by Economic Growth and what this means for Chinese Productive Capacity.
Economic Growth can simply be defined as the growth in the productive potential of the economy over a given period of time. It is typically measured by growth in the real GDP.
Economies are constantly changing over time for a variety of reasons. Part of the change involves fluctuations in the productive capacity, the ability to produce goods and services. Increases in the productive capacity are known as Economic Growth.
One of the main components that economists can use to demonstrate and discuss economic growth is the Production Possibility Frontier. The PPF (Production Possibility Frontier) will exhibit the maximum or potential output of an economy, when the economy grows, the PPF will move outwards.
The diagram on the left shows a typical PPF curve, as you can see a shift outwards demonstrates economic growth. This type of diagram can be used effectively to exhibit the kind of economic growth that the Chinese economy has been seeing since 1978.
A more detailed explanation of the prominent causes for economic growth would attribute it to the following factors, land, labour, capital and enterprise. National output can be increased if there is an increase in the quantity or quality of the inputs to the production process. Output can also be increased if existing inputs are used more efficiently.
Land, one of the four main components in the factors of production is defined in economic terms as all natural resources, and not just lands itself. Countries can experience huge economic growth through the exploitation of natural resources located in the country. An example of a country experiencing sustained and accelerated economic growth as a result of unrelenting use of natural resources is Saudi Arabia who without the large oil reserves located within the country would almost certainly be a deprived country. Countries
1, Explain what is meant by Economic Growth and what this means for Chinese Productive Capacity.
Economic Growth can simply be defined as the growth in the productive potential of the economy over a given period of time. It is typically measured by growth in the real GDP.
Economies are constantly changing over time for a variety of reasons. Part of the change involves fluctuations in the productive capacity, the ability to produce goods and services. Increases in the productive capacity are known as Economic Growth.
One of the main components that economists can use to demonstrate and discuss economic growth is the Production Possibility Frontier. The PPF (Production Possibility Frontier) will exhibit the maximum or potential output of an economy, when the economy grows, the PPF will move outwards.
The diagram on the left shows a typical PPF curve, as you can see a shift outwards demonstrates economic growth. This type of diagram can be used effectively to exhibit the kind of economic growth that the Chinese economy has been seeing since 1978.
A more detailed explanation of the prominent causes for economic growth would attribute it to the following factors, land, labour, capital and enterprise. National output can be increased if there is an increase in the quantity or quality of the inputs to the production process. Output can also be increased if existing inputs are used more efficiently.
Land, one of the four main components in the factors of production is defined in economic terms as all natural resources, and not just lands itself. Countries can experience huge economic growth through the exploitation of natural resources located in the country. An example of a country experiencing sustained and accelerated economic growth as a result of unrelenting use of natural resources is Saudi Arabia who without the large oil reserves located within the country would almost certainly be a deprived country. Countries