This question was posed in our forum and is now placed here:
I have a research about economic growth. So there are 4 question.
I am very grateful to you if you answer :
1- why do have developed nations a little GDP rate than developing nations?
( for example USA has 1% and Iran has 12% )
2- is the economic development cause of the economic growth or the economic growth cause of the economic development ?
3- is it good a high GDP rate for a long time ?plz explain
4-does a high GDP rate develope the economy of nations? plz explain
5-why China wanna reduce the GDP rate ? is it good ? plz explain
1. Underdeveloped nations have the ability to entertain huge gains because their economies are so small and industrialization makes huge gains as they catch up to the rest of the world. Developed nations tend to experience gains through more investments, spending, new technologies. etc.
2. Development then growth… but hey, however you want to interpret it 😛
3. NOt sure your question. Positive GDP is healthy, brief periods of decline are expected (2-3 quarters)
4. Not sure what you’re asking
5. China feels they are growing too fast, that they’ll have too much investment and at some point not enough money/labour/worldwide demand to support it and thus a huge bust in the economy with empty building and factories and lost money both domestically and from international investments.
Basically, it’s quite simple, if you are familiar with the steady state theory, it implies that countries that are developing generally have a higher growth rate than those who are already well off. In other words, for the U.S. to see a dramatic increase in GDP, the only long run factor which increases income/GDP (gdp (total expenditures = total income) is technological growth. In regards to China lowering their GDP rate…I don’t think they want to in a sense actually lower it but by imposing a population restriction, then GDP per PERSON rises however it remains constant/falls in the long run as a whole.