Economic growth

Economic growth
Economic growth is best defined as a long-term expansion of the productive potential of the economy.
From tutor2u , I've learn advantage and disadvantage of economic growth:
Advantages of economic growth:
1. Higher Living Standards: e.g if economic growth that means the real GDP per head goes up. So people have more money , they can afford more things, the living standard will increase because of that.
2. Employment effects:Growth stimulates higher employment. Because the demand will increase , the producer need more labour to increase the productivity, employment therefore goes up.
3. Fiscal Dividend:economic growth is good for government finance.boosting tax revenues and providing the government with extra money to finance spending projects
4. The Investment Accelerator Effect:because economic growth leading to rising demand , it encourage people investment on capital machinery, it is help the AS increase.
5. Growth and Business Confidence:because economic growth good for both of them , for example when some good news heard by labour for their work, they think more confidence.and leading to the productivity goes up.
Disadvantages of economic growth
1.Inflation risk:if economic growth very quick, it may lead to inflation, because with economic growth, the demand increase too. The economic therefore face to inflation risks.
2.Environmental concerns:because economic growth lead to higher live standard, therefore some negative externality will appear. For example , live standard goes up , the demand of car will increase , so more and more pollution had create .