Importance Of Economic Growth In The Economy

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Introduction
Economic growth is an important factor under consideration in the economy. It is normally regarded as economic progress and advancement. It is an increase in the ability of an economy to produce goods and services within a specified period of time.
It is termed as long-term expansion in the productive potential of the economy to satisfy the wants of individuals in the society in economics. A good performance or a positive economic growth plays an important role in the national income. A sustainable economic growth of a country is desired as it plays a role in the provision of labor and other economic factors.
Economists as both scientists and policymakers
Economists develops hypothesis and models that can be confirmed using a set
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Allocation of scarce resources
Allocation of scarce resources are done through the price system. This is done by the private market as an economic institution.
The law protect property rights. A person has a right to sell his/her skills or labour for wages. He/she has the right to use the wages to purchase any property he is willing and able to purchase. It becomes very important to enforce contracts for a good market.
Political institutions can wreak havoc on markets e.g. the North Korea and Venezuela, or any improve markets. It is also stated in the federal clean air and water acts.
The economic way of thinking allows one to identify winners and losers when resources are reallocated. It is almost never the case that the proposed change will have only winners.
Circular flow model A person goes out of the households and finds a job in the firms or the business. He/she provides an input to output a product. These products are sold to the market and bought by the households. The person continues to work for the firm. The firm pays the household wages, rent and profits when it provides human, natural and capital
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The income earned by the person is brought back to the household. The households will spend the money in the market place. Money gets back to the firm and the cycle starts. The household buy goods and services from the firm and the firm receives them as revenues.

Economy and economic actors
Economic actors are self-independent people with the ability to use, land, labor and capital for their own self-interest. As much the economic actor is struggling to influence the way people purchase or sale in the industry, the economic has an impact in controlling their desires. The economy determines how goods and services are to be distributed, it determines how buyers and sellers are to relate by introducing a variety of goods and service, A lot of resources and competition to equalize the existence of economic actors.
GDP
Gross domestic product (GDP) is the value of finished goods and services produced within a country in a specific time period usually one year. It measure the national overall economy.
Calculating GDP
GDP = C + G + I + NX
Where
C= private consumptions
G= government spending
I= countries investment
NX= Net exports (Exports

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