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OUTLINE Connection between economic growth and social costs Kinds of social costs

OUTLINE

Connection between economic growth and social costs
Kinds of social costs

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Connection between economic growth and social costs an increase in real

Connection between economic growth and social costs

an increase in real

GNP
a beneficial force
the downsides of this process damage to some sectors of a society
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Kinds of social costs

Kinds of social costs

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Kinds of social costs Inflation. AD >AS = inflation demand increases

Kinds of social costs

Inflation.
AD >AS = inflation
demand increases

too quickly
firms push up prices.
Graph showing economic growth caused by rising AD leads to inflation.
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Kinds of social costs 2. Current account deficit increase in spending

Kinds of social costs

2. Current account deficit
increase in spending

on imports
deterioration on the current account.
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Kinds of social costs 3. Environmental costs increase output and consumption

Kinds of social costs

3. Environmental costs
increase output and consumption
causes an

increase in pollution
health problems such
greater use of raw materials
speed up depletion of non-renewable resources
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Kinds of social costs 4. Inequality growth can benefit a small

Kinds of social costs

4. Inequality
growth can benefit a small section

of society more than others
depends upon tax rates and the nature of economic growth
a force for reducing absolute and relative poverty.