Economic Growth

CHAPTER 5
Economic Growth
• Economic growth has occurred when the total value of goods
and services produced in a year is greater than in the year before.
• Measured by Real Gross Domestic Product (Real GDP).
• economic growth is the rate of increase in real GDP
• Current target zone of economic growth is 3-4% p.a.
• This range is to ensure that the economy:
i. sustainable (without undue environmental or other social costs).
ii. reduce unemployment or maintain full employment, without
accelerating inflation.
Causes of Economic Growth
Resources Technology Investment in people
• Natural population growth • Technology allows for the • Better training and better
and immigration increase use of improved methods research, for example, may
labour resources. of production. lead to future growth -
improves human capital,
• Investment spending by • Better work practices
making labour more
firms and governments improve labour
productive.
increases the economy’s productivity.
stock of capital resources.
• The use of increasingly
• Mineral exploration and better capital goods
new plantings increase increases both the quality
land resources. and amount of production.
Benefits of Economic Growth
Standard of living Less absolute poverty Greater tax revenue
• Standard of living is • As income and • Increase taxes such as
measured by the employment in a nation income tax, company tax
increase, a greater and environment tax
consumption of goods collected by government.
and services in a period. proportion of its
population is able to • Governments are then able
• As households buy and escape poverty, earning to provide a greater level of
consume more goods sufficient income to services such as welfare
and services, their access a minimum payments, redistributing
standard of living essential level of goods income to those who
and services and have less, essential
increases. opportunities. services such as utilities
(water supply, gas and
electricity), health and
education, better transport
and communication
infrastructure.
Costs of Economic Growth
Environment Inequality Social costs
• Damage to the natural • Some groups in society • One of the casualties of
environment. increasing their income economic growth is the
• The easiest and much more rapidly than reduced demand for
cheapest way to others. unskilled or low-skilled
dispose of wastes is to • For example, in some labour.
dump them into the air, oil-rich countries, a • This means that
onto land, or into the small percentage of the unskilled job seekers
seas and waterways. population is very may remain
wealthy, while the unemployed or accept
majority is quite poor. very low wages,
becoming the ‘working
poor’.
Government Intervention
• To help growth the government can:
i. Promote saving, e.g. provide incentives for households to
save.
ii. Promote research and development, e.g. give tax breaks for
investment in R&D.
iii. Promote education, e.g. provide funds for education, ensure
qualifications are relevant to industry.
iv. Promote mobility of factors of production between
industries.
Press Release
Reformasi ekonomi negara ke arah lebih mesra alam.pdf
Kadar pengangguran menurun.pdf
Bukti pemulihan ekonomi semakin jelas.pdf
US firms invest over RM165bil in Malaysia, says Amcham.pdf
Sektor perkhidmatan hampiri prestasi sebelum pandemik.pdf
Pemulihan ekonomi Malaysia dijangka berterusan – IMF.pdf
Buka sempadan penting pacu ekonomi.pdf
Malaysia Economic Performance Third Quarter 2022
Thank you
Khairul Niza Ahmad Zubir​
013-3336692
V202
khairulniza.zubir@intec.edu.my