Economic Growth

May palatandaan ang Economic Growth. Ano ang palatandaan? Dalawa! Capital Accumulation and Technological change.

Ano ang Capital Accumulation? Kapag sinabi nating Capital Accumulation, nag-i-increase, for example, 'yung resources. At kasama sa resources hindi lang 'yung raw materials kundi isinama na rin 'dun sa pagkakataong iyon pati 'yung human resources. Both 'yung natural resources and human resources.

 So, what else could we expect if there is an increase in natural and human resources? There would be an increase in what?

Production! Which is positive to an economy.

Now, the other one is Technological Change. What about Technological Change? How can it improve of the economy of the given country? And how can technology improves the production in such a way that it would result to an economic growth?

Well, to tell you frankly, for example panahon nila David Recardo, and tao ay kayang magproduce ng apat na pins in a day. Needle. Mahirap palang gawin 'yun kasi nga maliit. Ngayon, 'nung maimbento ang machines dumami 'yung needles pero more than that mas bumilis 'yung production.

I remember 'nung grade 5 ako, kasi may subject... magaling kasi 'yung teacher namin sa Science. Sa kanya ko natutunan na "What is simple machines?" Machines are the devices that make work faster and easier. Kaya hindi ko 'yan makalimutan. Kapag nagtawag 'yan e lagot ka 'pag 'di ka nakasagot.

And since machines can make work faster and easier, that lead to mass production of goods and services in 19th century. The first industrial revolution ever in the world.

And because of that, anong nangyari? Mass production. Positive to an economy. Mass production 'yan dahil dun sa Capital Accumulation, na kapag pinagsama, Economic Growth.

                              Halimbawa ito ng Balance and Imbalance Economic Growth.


Now, bakit balance? Bakit 'yung isa imbalance? Anong nangyari?

If one or two or some sectors of an economy benefited from the economy, there is an Imbalance Economic Growth kasi ilan lang ang nakikinabang.

Pero, if every given sectors of an economy benefited from the economy, that's the time, Balance.

Don't forget it. Kapag ilang sector lang ang nakikinabang, that would result to an Imbalance Economic Growth. Whereas all given sectors of an economy benefited from such, then that is Balance Economic Growth.

Anong ibig sabihin nito?

Kapag nag move ang curve to the right, 'pag mayroong outward shift, in other words the curve moves from left going to the right, it is a sign of Economic Growth.

Why?

Because an additional curve suggests that there is an increase in resources and technology. So, mas marami ka ma-i-po-produce. Kasi dati hanggang dun lang (PPF 1) Ang movement ay going to the right, positive 'yan. May Economic Growth.

Pero, 'pag ang movement ay from right going to the left. Kapag may inward shift, ano ang sina-suggest n'yan? May Economic Shrinking na nagaganap. Decline in the performance in an Economy.

Can you follow?