Introduction:
An increase in the real output of goods and services over the specific time of a country is measured as its economic growth. The real economy, in the long run, is the concept where no limitations prevent the output level in different time spans. Long-run growth is preferable because it sustains the growth of that country. When it comes to planning a nation’s economy, we consider all the factors that contribute to its productivity, even in the long run. The growth of an economy is based on its inputs, capital and labour. The more input, the more growth. If we increase productivity, it will result in sustained increased growth in the long run. Furthermore, an increase in capital investments also leads to a higher level of growth in the country’s real economy.
The Factors Determining The Country’s Productivity:
Capital, labour and other inputs used to make goods and services are known as factors of production. And these factors determine the productivity of that country.
- Capital:
It is stock for the production of new goods. It could be different. It can be an investment, tools for repairing, or heavy machinery for the production of new products or buildings. It is also an input for the production process, which is the last time produced as output.
- Human Resources:
Abilities and knowledge are all we call human resources. Countries with highly educated and experienced workers tend to increase their productivity more rapidly.
- Natural Resources:
These are renewable and non-renewable resources. This includes minerals, rivers, forests, reserves of coal and petrol.
- Technology:
Modern and technical ways to increase growth. A technology with limited applicability is less useful for the increase in growth. More adaptation to technology means more chances for growth.
