Production and Growth in Developing Countries

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Production and Growth in Developing Countries Production and Growth is vital to every nation in order for a country to survive it has to has to produce. GDP per person Gross Domestic Product is one of the statistics used to measure a nation’s growth. Economic growth is also measured by the growth rate per year, this measures how much an economy has grown each year. A nation’s productivity is also determined by its physical capital ,human capital natural resources and technical knowledge. Countries are measured by two standards; developing and advanced economies . During the past fifteen years developing countries have seen huge growth, and advanced nations have seen only minimal growth. Growth in these developing nations can be attributed to the catch up effect but many of these countries are experiencing growth in technology due to globalization. The government can also play a vital role in encouraging economic growth by promoting policies that enhance foreign investments, education , property rights and health care. Gross Domestic Product was first introduced by economist John Maynard Keynes in 1939 to measure the inflation rate in Britain after the first World War.(Jorge,1982) The British faced a huge inflation rate after the First World War and did not want it to happen again. The creation of GDP was successful as the British did not incur the high level of inflation as they did after the First World War. Ever since then, GDP has been used to monitor economic growth but GDP does not truly measure a nation’s growth rate. Real GDP per person measures the output of each person in a country and is calculated dividing the GDP by the population of the country. Also called GDP per capita, it is a very accurate measure of the income of each person in a nation. The growth rate

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