Question

What are the limits to U.S. long-term economic growth? Is there anything that our government can do to address these limits, or would it be a bad idea to try? Minimum of 250 words

Answer 1

Following are limits to US long term economic growth:

• Physical capital resources : It includes capital equipments.
• Human capital resources : it refers to the labor forces and skills.
• Infrastructure development : it includes road, communication and transports.
• Technological development : It increases productivities of workers.
• Availability of natural resources: Natural resources provide raw materials which are converted into final products.

Above factor can increase potential GDP level of US. Government can make investment in research and development to development technology. New development of technology makes factor of productions more productive. Further, infrastructure development pushes up potential level of GDP.

Availability of natural resources can not be increased easily or these are fixed.

Human resource also plays critical role in growth of country. it can be increased through immigration. More immigration leads to rise in labor forces. it reduces the overall wage rate. Thus, job availability for domestic workers fall or competition with immigrated workers pull down equilibrium wage rate. Such outcomes might not be well accepted by the native workers.