Economic growth is being measured by the increase in its GDP or Gross Domestic Product. GDP on the other hand means the combined value of all services and goods like archerypower, computers etc. produced within the country for a given year. Many are forcing to contribute to economic growth but, there’s no sole factor that can deliver the ideal or perfect amount of growth that is needed by the economy.
Trial and Error
The sad thing is, recession is something that can’t be disregarded and it might be caused by geo-financial and geopolitical events as well as other exogenous factors. From economists, world leaders and politicians, they are all in debates of what would be the best growth rate and on how they can achieve it. It’s vital to study how the economy grows or in other words, what or who would be the key participants that will help the economy to grow.
In the US, economic growth is oftentimes driven by business investment and consumer spending. If consumers, for example, are in the real estate to buy house, contractors, construction workers and home builders will be benefited by this economic growth. Businesses are driving the economy as well when they are hiring workers, investing back in their business and raise wages.
A company that is buying new manufacturing plant or opt to invest in new technologies are creating new jobs and spending that eventually results to economic growth.
It’s a Synergy Effect
There are other factors that are helping to promote consumer as well as business prosperity and spending. Banks for instance are lending money to consumers and companies. As businesses have an easy access to credit, they may be able to finance new production facility, purchase new fleet of vehicles or even start with new product service or line.
The spending as well as business investments in return will experience positive effects on all of the companies that are involved. On the other hand, the growth extends as well to those businesses that are doing business with the companies which include bank employees, truck manufacturers and so forth.