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ECS3709 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 24 October 2024
ECS3709 Assignment 5 (COMPLETE ANSWERS) Semester 2 2024 - DUE 24 October 2024
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,ECS3709 Assignment 5 (COMPLETE ANSWERS)Semester 2 2024 - DUE 24 October 2024; 100%
TRUSTED Complete, trusted solutions and
explanations.
SECTION A [20 Marks] A1 Comparative Living Standards,
Savings, and Economic Growth (a) Discuss how the
measurement of living standards between countries can
influence our understanding of economic growth. (6) (b) Using
real life examples, explain the role of savings in promoting
economic growth and how differences in savings rates between
countries might affect their long-term growth prospects. (4) A2
Technological Progress, Unemployment, Inequality, and
Economic Growth Questions (a), (b) and (c) are based on the
following table: (a) Using the data provided in the table, discuss
the relationship between technological progress and economic
growth. (6) (b) Based on the information in the table, explain
how technological progress might affect income inequality in
these countries. (2) (c) Mention and explain any two potential
determinants of technological progress that could explain the
differences across countries. (2)
Here’s a structured response to your questions on comparative
living standards, savings, technological progress, and their
effects on economic growth:
A1 Comparative Living Standards, Savings, and Economic
Growth
,(a) Measurement of Living Standards and Economic Growth (6
Marks)
The measurement of living standards across countries often
relies on indicators such as Gross Domestic Product (GDP) per
capita, Human Development Index (HDI), and income
distribution metrics. These measurements influence our
understanding of economic growth in several ways:
1. Insight into Economic Health: High living standards
typically correlate with higher levels of GDP per capita,
suggesting that an economy is productive and capable of
providing its citizens with a decent quality of life.
Conversely, low living standards may indicate stagnation or
regression in economic growth.
2. Resource Allocation: When policymakers use living
standard measurements, they can identify areas needing
improvement. For example, if a country has a high GDP but
low HDI, it may indicate that wealth is not evenly
distributed, prompting policies aimed at income
redistribution.
3. Long-term Growth Potential: Countries with higher living
standards are likely to invest more in education,
healthcare, and infrastructure, which are crucial for
sustaining long-term economic growth. Lower living
standards may suggest underinvestment in these areas,
leading to potential growth barriers.
, 4. International Comparisons: By comparing living standards,
we can assess the effectiveness of different economic
policies and systems. For instance, Scandinavian countries,
despite high taxes, achieve high living standards and
economic growth through robust welfare systems, while
some low-tax countries may struggle with inequality and
public service provision.
5. Quality of Life Considerations: Economic growth is not
solely about GDP increases; the quality of life also matters.
Indicators that measure environmental quality, social
equity, and leisure time can paint a fuller picture of growth
that considers societal well-being alongside economic
performance.
(b) The Role of Savings in Promoting Economic Growth (4
Marks)
Savings play a crucial role in promoting economic growth
through several mechanisms:
1. Investment Capital: Savings provide the funds necessary
for investments in businesses and infrastructure. For
example, in East Asian countries like South Korea, high
savings rates have funded substantial investments in
technology and manufacturing, leading to rapid economic
growth.
2. Financial Intermediation: In countries with developed
financial systems, savings are transformed into loans for
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