Final answer:
Economic growth is driven by advancements in technology, improvements in human and physical capital, and market-oriented economic policies and incentives, all of which lead to capital deepening and increased efficiency.
Step-by-step explanation:
The vigorous economic growth of a nation can be influenced by numerous factors. Four key drivers are the advancement of technology, the accumulation of human capital, the increase in physical capital per worker, and the implementation of market-oriented economic policies and incentives. These components when combined create a robust environment for growth.
Technology broadly includes new production methods, ranging from breakthrough scientific innovations to improvements in management and institutional frameworks. Enhancing human capital involves upgrading the education and skills of the workforce, while increasing physical capital refers to raising the capital available per worker. Both of these investments result in capital deepening. Lastly, the presence of a market-oriented context encourages efficiency and innovation within businesses and among workers.
Challenges can arise from existing governmental economic controls, which may limit growth and are often difficult to dismantle quickly. Measures such as deregulating industries, particularly the banking and financial sectors, and reducing government interference in certain industries to allow market forces to play a larger role can be instrumental in fostering a faster rate of economic expansion.