Population growth:
- If the growth rate of population is higher than the rate of economic growth, there will be lesser savings in the economy. Fewer saving will reduce investment and as a result, income and employment will also be less.
- With lesser employment and income, the euective demand will be less, and overall, there will be slowdown in economic activities.
- Economies of nearly all nations are interconnected through trade. Therefore, depending on the amount of bilateral trade, business fluctuations that occur in one part of the world get easily transmitted to other parts.
- Changes in laws related to taxes, trade regulations, government expenditure, transfer of capital and production to other countries, shifts in tastes and preferences of consumers are also potential sources of disruption in the economy.
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