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The Importance of Economic Growth

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Why is economic growth important? Why could the difference between a 2.5 percent and a 3 percent annual growth rate be of great significance over several decades?

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This solution discusses the importance of economic growth and why a small difference in growth today may have a large significance in the long-term in 450 words.

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Why is economic growth important? Why could the difference between a 2.5 percent and a 3 percent annual growth rate be of great significance over several decades?

In order to improve individual overall welfare, the wealth of the nation must increase. Economic growth provides both individuals and governments with options on using the increased wealth. For individuals it means more expenditure and lifestyle choices, for governments it means more options in providing public services.
Economic growth means a higher standard of living, provided population does not grow even faster. Economic growth is measured by gross domestic product (GDP). Economic growth is defined as positive rate of change in real GDP. A satisfactory rate of economic ...

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