Factors that affect the long-run rate of economic growth Essay

Factors that affect the long-run pasture of frugal growth - Essay ExampleThe pace at which long economic growth is realized is referred to as the long-run rate of economic growth. Natural Resources These be substances that occur naturally in temper and are beneficial for the growth of economy. Examples include timber, mineral deposit, water, air and land. A well endowed boorish in terms of the natural resources will realize a faster economic growth rate provided all the other factors are constant, that is, the country does not suffer any form of abnormality in issues such as the morale of the citizens, labor provision or transportation that would otherwise lead to stunt or retarded economic growth. It is easier for a country having natural resources to realize a self betterment when citizens of the country in question are trained to utilize a given natural resource. For example, a country that has mineral deposits, target easily acquire the necessary skills and machinery re quired for the mining process. In another(prenominal) perspective, a country might be having a commodity which perhaps it does not need at a given sentence. Another country in need of the resource can buy it and in turn, the selling country will generate some income which in turn will lead its economic growth (Mankiw, 2001). Labour Resources It is the partial or whole engagement of a persons frame or mind with a view of receiving some payment in return. It represents the required human roof required in the transformation of both raw and national resources into consumer commodities. It is only achiev fitted with the availability of able bodied persons capable of working in different fields due to its flexibility. Improvement to the human detonating device can be d integrity through training them to improve their skills and in the long run be in a position of handling more technical tasks even better. Entrepreneurship It is taken as a factor of production that will lead to the lo ng-run rate of economic growth on the one thousand that there can be existence of resources and still not be converted into finished goods. Entrepreneurs are needed in order to create goods and services which are of benefit to man. They assume any bump that comes in their way (Melvin & Boyes, 2012) Components of the Gross national Product (GDP) measure According to Stroup and Sobel, Gross Domestic harvest-tide refers to the total value of commodities produced and services rendered in a country within a period of one year. The final goods and services are mainly categorized into four, namely Consumption (C) Investment (I), Net Exports (F), and political sympathies Purchases (G).They can also be referred to as building blocks of the Gross Domestic Product and can be illustrated in the equation C + I + F + G = GDP. Consumption This forms the largest component of the Gross Domestic Product. It consists of purchases of enduring goods, non durable goods and services. Durable goods a re the goods that are used for a long period of term since they do not get worn out easily. Their useful life is usually more than terce years. Examples of such commodities include washing machines, vehicles, textbooks, furniture and mobile phones (Stroup & Sobel, 2009). These goods can be resold by the owner after a given period of time. This can be as a result of reduced susceptibility of the good in question or perhaps, the owner wants to raise cash to use elsewhere. The owner can also resell ones durable goods as a result of wanting to acquire a unsanded one. Non durable goods their useful life is very short and hence used for a short time period. Some of them are consumed immediately after purchase. Examples include food, cosmetics, soap and petrol. Unlike durable goods, these goods are non resalable. Whereas durable goods such as a car or a business premise can be rented out, the same