Question

At the core of understanding economic growth is the idea that to raise living standards over time, an economy must

save and invest.


produce and consume goods and services.


export and import.


employ resources and earn incomes.

Answer 1

Understanding economic growth is crucial and involves saving and investing to enhance living standards. High-income countries rely on policies that invest in education and technology, with the financial system playing a key role in allocating resources for growth. Consistent growth results in higher living standards and job creation.

Step-by-step explanation:

The core understanding of economic growth requires recognizing that an economy must save and invest to enhance living standards over time. Saving, which is refraining from consumption, allows resources to be directed toward increasing physical and human capital, as well as fostering technological advancements. To achieve these improvements and fuel economic growth, a stable and market-oriented economic environment, supported by policies targeting fiscal and monetary stability, is necessary.High-income countries focus on policies such as investing in education, technology, and physical infrastructure to bolster economic growth. The financial system, encompassing savers, investors, and financial institutions, plays a crucial role by reallocating savings to productive investments. Consistent economic growth leads to the creation of jobs and elevates the standard of living by increasing per capita GDP.