Economic growth has a close relationship with economic development. We need economic growth to support economic development because it contributes to increased output and income in the economy, which in turn contributes to prosperity.
Where Do Comparative Advantages Come From?
The comparative advantage stems from the ability to produce goods and services at low opportunity costs, which is influenced by how available economic resources (also called factors of production) are and how good their quality is. For
Three Injections In The Economy
Investment, government spending, and exports are three injections in the economy. They contribute to increasing the demand for goods and services in the economy and, therefore, stimulate more job and income creation. What is injection? An
How Do Imports Impact the Economy?
Imports impact the economy in several aspects. For example, at the micro level, imports affect competition by increasing supply in the domestic market. Consequently, there is more pressure on prices and profitability in the domestic market. On the
What Are the Factors Affecting Imports?
Availability is a factor affecting imports. We import goods from abroad because they are unavailable in the domestic market. For example, the domestic economy does not produce them because the geographical location does not support them. Another
Reasons Why International Trade Exists
International trade exists for several reasons. First, differences in demand underlie trade. Certain products we want are not produced in the country. Instead, they are only available in other countries. So, we have to import to get
What are the Benefits of International Trade?
Increased access to cheaper and more varied goods and services is key benefits of international trade. Thus, it allows us to increase well-being. We can satisfy our needs and wants by buying more varied and cheaper products not produced
Autarky: Examples, Pros, and Cons
What's it: Autarky is a system or philosophy in which an economy seeks to be self-sufficient. If a country adopts this system, it will try to meet its needs from within. And suppose the country is not involved
Adverse Economic Shocks: Examples, Impacts, Solutions
What's it: An adverse economic shock is a sudden, unexpected, and dramatic change in aggregate supply and demand, hurting the economy. For example, shocks result in high and uncontrollable inflation. Or it causes a recession. In other cases, it