This will allow the economy to raise production from one level to another without comprising the production of another good.Expansion of resource capacity is made possible when the economy can import resources from other countries or raise the rate of utilization of resources more efficiently to reduce wastage.However, when we take a longer and dimensional discussion of the issue, it is quite impossible to eliminate the problem of scarcity when there is economic growth.
Improvement in research and development will raise productivity to increase production while the employment of more resources for production will both raise the level of output, allowing greater consumption of goods and services without reducing the consumption of other goods and services.
The expansion of resource capacity will mean that there are more resources available for the economy to increase production.
Initial low levels of inequality are associated with more negative elasticities of poverty reduction concerning growth.
Higher initial inequality results in less effect on poverty with an increase in economic growth.
As for potential growth, it refers to the expansion of the availability of the resources, implying that there are more resources for production in the economy.
This means that the potential production capacity has expanded and this is represented by the outward shift of the PPC.We will start by defining Economic growth and development.Having economic growth without economic development is possible.‘Quality of life’ is often measured using the Human Development Index, which is an economic model that considers intrinsic personal factors not considered in economic growth, such as literacy rates, life expectancy and poverty rates.We can also have a situation where there is growth and development, i.e. Development alleviates people from low standards of living into proper employment with suitable shelter.In conclusion, it must be noted that the problem of scarcity can never be eradicated as long as wants are unlimited and resources are limited but a short term rise in economic growth will enable the increase in production will help to alleviate the problem of scarcity.What is the difference between Economic Growth and Development?Economic growth in an economy is demonstrated by an outward shift in its Production Possibility Curve (PPC).Another way to define growth is the increase in a country’s total output or Gross Domestic Product (GDP). A country’s economic development is usually indicated by an increase in citizens’ quality of life.Economic Growth does not take into account the depletion of natural resources, which might lead to pollution, congestion & disease.Development, however, is concerned with sustainability, which means meeting the needs of the present without compromising future needs.