Homework Help
Homework Help
View Details
Assignment Help
Assignment Help
View Details
Online Tutoring
Online Tutoring
View Details
Capital Growth
Let us turn to the question of economic growth and see what happens to the production possibilities curve when the economy’s productivity capacity increases over time. As already pointed out, the production possibility curve is drawn with a given amount of productive resources like land, labour and capital equipment. Now, if these productive resources increase, the production possibility curve will shift outward and to the right showing that more of both goods can be produced than before.

Further, when the economy makes progress in technology, that is when the scientists and engineers discovered new and better ways of doing things the production possibility curve will shift to the right and will indicate the possibility of producing more of both the goods with a given and fixed amount of resources.

From above it follows that when the supplies of resources of increase or an improvement in technology occurs, the production possibility curve shifts outward such as from PP to P’P’ on production possibility curve P’P’, the economy can produce more goods than on the production possibility curve PP. the increase in the amount of capital, natural and human resources and the progress in technology are determinants of economic growth. Thus, switch the growth of the economy production possibility curve shifts outward.
 
It is very important to understand the distinction between (i) the movements of the economy from a point inside the production possibility curve to a point on it, such as from point U to point Q and (ii) the movement of the economy from the production possibilities curve to another. In both these cases national product and output of goods and services will increase. But the former involves fuller employment of the given resources while the latter involves the increase in resources or productive capability. While the first type of movement is dealt with by the short-run macroeconomic growth. The fact that in both these movements of the economy the national product and income income increases they are likely to be confused each other.

On the other hand when the economy is fully utilizing its given resources and is, therefore working at appoint in the production possibility curve, the increase in national output and employment cannot be achieved by simply raising aggregate demand. Under such circumstances national income and employment can be increased by adopting measures which generate economic growth. These measures aimed at generating economic growth involve stepping up of rate of capital accumulation and making a progress in technology.

Services:-  Capital Growth  Homework |  Capital Growth  Homework Help |  Capital Growth  Homework Help Services | Live  Capital Growth  Homework Help |  Capital Growth  Homework Tutors | Online  Capital Growth  Homework Help |  Capital Growth  Tutors | Online  Capital Growth  Tutors |  Capital Growth  Homework Services |  Capital Growth







 

Submit Your Query ???
Topics
Economies In Consumption Economies In Production Welfare Economics Theorem Market Failure Pareto Criterion Welfare Economics Value Welfare Economics Asymmetric Information Present Values Insurance Market Intertemporal Choice Intertemporal Analysis Market Signalling Perpetuity Stocks Versus Flows Lemons Market Principal Agent Problem Moral Hazard Oligopoly Characteristics Oligopoly Price Determination Firms Interdependence Price Discrimination Oligopoly Oligopoly Price Output Price Discrimination Degrees Price Discrimination Conditions Price Discrimination Possibility Price Discrimination Timing Profit Maximization Price Theory Profit Assumption Profits Theory Economic Rent Rise Selling Costs Effects Selling Costs Role Economic Systems Capital Formation Comparative Statics Competitive Markets Economic Dynamics Economic Statics Economic Growth Microeconomics Importance Inductive Method Production Inefficiency Micro-Macro Interdependence Microeconomics Scope Scientific Theory Economic Laws Nature Production Possibility Curve Economic Hypothesis Economics Scarcity Inductive Methods Steps Consumer Surplus Applications Cardinal Utility Demand Changes Complements And Substitutes Consumer Surplus Concept Consumers Equilibrium Consumer Surplus Demand Determinants Demand Curve Demand Schedule Elasticity Tax Demand Extension Income Elasticity Indifference Curve Indifference Curve Approach Indifference Curves Demand Theory Substitution Marginal Rate Marginal Utility Rate Market Demand Curve Market Demand Function Marshalls Consumer Surplus Consumer Surplus Measurement Price Elasticity Measurement Preference Hypothesis Price Consumption Curve Price Elasticity Importance Price Elasticity Determinants Demand Price Elasticity Revealed Preference Theory Substitution Elasticity Demand Law Interest Classical Theory Productivity Concepts Rent Concepts Demand Factor Determinants Fishers Interest Theory Functional-Personal Distribution Interest Keynes Interest Theory Land, Rent, Cost Distribution Theory Loanable Funds Marginal Distribution Profits Dynamic Theory Quasi Rent Rent Concepts Rent Ricardian Theory Risk And Uncertainty Factors Supply Wage Determination Average Fixed Cost Average Total Cost Capital Douglas Production Function Compensation Principle Marginal Returns Capital Growth Scale Economies Technical Substitution Entrepreneur External Economies Supply Factors Production Factors Isoquants Properties Human Capital Profit Innovation Theory Interest Theories Isoquants Labour Land Production And Cost Linear Production Function Long Run Equilibrium Marginal Cost Marginal Substitution Monopoly Characteristics Monopoly Price Monopoly Capacity Monopsonistic Discrimination Opportunity Cost Production Function Returns To Scale Capital Role Supply Rent Concepts Fixed Variable Costs External Economies Types Advertising Effects Average Revenue Collusive Oligopoly Competitive Strategy Contestable Markets Dominant Strategy General Equilibrium Monopolistic Equilibrium Monopoly Features Industry Equilibrium Firm And Pricing Supply Curve Marginal Revenue Market Market Forms Market Cartels Monopoly Measurement Monopolistic Competition Monopoly Monopoly Sources Newmann Game Theory Partial Equilibrium Price Determination Price Leadership Thumbs Price Rule Product Differentiation Rent Control Sales Maximization Selling Costs Static Dynamic Stability Time Element Price