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The Causes and Consequences of Economic Growth - Why do some countries grow faster than others?
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The Causes and Consequences of Economic Growth (a) Why do some countries grow faster than others? (20 Marks) In order to analyse why countries grow at different rates, we must be aware of the determinants of growth. Short run growth is determined by cyclical changes in both aggregate demand, AD, and short run aggregate supply, SRAS. The makeup of AD is of the factors: consumption, investment, fiscal changes, and overseas trade. These can therefore be changed by fiscal and monetary policy changes. The changes in AD therefore result from the governing economic policy makers of that specific economy, and so will not have a huge overall effect on the differing rates of growth. SRAS is altered by fluctuations in raw material cost, labour costs, and government intervention using taxes and subsidies. These however are likely to affect most economies, albeit that some countries are more industrial than others are and so will be...
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