This chapter focuses on the importance of productivity as a part of growth in GDP, the somewhat obvious idea that you can't consume something that was never produced, thus consumption is tied directly to productivity. How does that concept support national subsidies in education and health? How about infrastructure?
Population growth tends to be a "hot topic". What are the negatives associated with additional population growth? What are the positives? (In terms of growth in GDP). Where do you fall in the discussion? Why?
Subsidies allow for growth in areas which may not able to create the demand without supplemental support. By creating safe and useful infrastructure, governments can create avenues for growth by increasing productivity. More roads of higher quality mean more distribution of goods and services.
I believe education and healthcare are also areas where when basic needs are taken care of, workers are more productive and can plan ahead. An education system produces the future ideas and workers while a healthy work force will also be more productive.
The US is a consumer based economy and if we are on producing, we are not consuming. There subsidies are used to encourage growth in these areas which allows for the consumption of more goods and services.
Population growth can be seen as a positive aspect of a healthy economy. It can lead to more production of goods and services, however population growth can also strain a system by limiting the availability of tools and skills needed for high production. "Countries with high population growth have large numbers of school-age children. This places a larger burden on the educational system." explains Mankiw.
My thoughts on population growth are a country needs a steady supply of workers to keep production up. Incentives can be made to either hinder or facilitate a rise in population. With many variables affecting the growth rate, a system with adequate controls to manipulate growth rates is something we need to do to handle growth.
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