Underlying Trend Rate of Growth

Explain the term ‘underlying trend rate of growth’ and the factors determining this rate. The underlying trend rate of growth represents a curve which shows the annual potential growth maximum that can be achieved with all available resources. An economy must target to increase this rate of growth and also actualize it. If the economy grows higher than this rate it will experience inflation. If lower it still has the capacity to grow. The trend rate of growth for an economy also represents the aggregate supply in the long run. The production possibility frontier also represents virtually more or less the same thing.
There are various factors that determine long run aggregate supply. One considerable factor is the level of investment in an economy. Investment is vital as it is the back bone of economy. It enhances an economy by building more facilities and providing infrastructure to further develop and produce more, both in terms of quality and quantity. The higher the level of investment the higher the increase in capacity terms what an economy is able to produce. This is the growth that is in the nation’s stock of capital. New capital embodies technological advancements which leads to higher levels of productivity.
The trend rate of growth is also determined by the trend growth of the working population of an economy. This is the trend of supply in the labour market. When the size of the working population increases it increases the potential working capacity of the economy. The magnitude of change in production output will reflect upon the level of labour/capital intensiveness in the economy. If the government can successfully increase the number of people of working age the trend rate of growth will increase. The trend rate of growth of factor productivity is a measure of gains in factor efficiency.

For most countries it is the annual rate of growth of productivity that drives the long-term rate of economic growth. But of more interest and importance is where gains in productivity come from. The macroeconomic data on productivity is simply the aggregation of productivity performance at a microeconomic level throughout every industry and market in the economy. Technological improvements which reduce the real costs of supplying goods and services and which lead to an outward shift in a country’s production possibility frontier

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Use the discount code "30OFFNOW" today and get a 30% offOrder Now