GDP Growth and Supply Side Policy

GDP Growth and Supply Side Policy

For an economy to grow it must increase labor, capital and/or productivity. While there are diminishing returns to capital and labor, growth from productivity is unlimited.

Governments have a role in providing the framework for sound economic growth. This includes having sound fiscal and monetary policy. Other factors that encourage GDP growth are reasonable taxes and regulation, low corruption, and openness to trade and foreign direct investment.

For this assignment you will write a paper analyzing the growth of a specific country. Identify one country that has demonstrated high GDP growth rates (over any time period) and answer the following:

1. Describe the growth rates and the time period of the growth 4 points
2. Explain the reason for the growth addressing:
1. Growth of capital, labor and productivity in the economy 4 points
2. Role of fiscal policy in GDP growth (taxes, spending and debt) 4 points
3. Role of monetary policy in GDP growth (money supply, interest rates and inflation) 4 points
4. Role of foreign direct investment and trade in GDP growth 4 points

The following websites are good sources of data

• www.imf.org Click on Data and Statistics.
• https://www.cia.gov/library/publications/the-world-factbook/index.html

Note: Your assignment must be in expository essay form, comply with APA style formatting, be 4-7 pages long (not counting cover and references pages), and in MS Word.