Economics and Growth Essay

Economics and Growth Essay

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The demand curve is likely to change upwards or rise as a result of changes in a number of factors. One, if there is a move up in the price of an alternative commodity, or decrease in price of the given commodity’s accompaniment. Two, if there is a rise in buyers’ income. Three, if the taste as well as preferencs of the consumers shifts in regard to the particular product or service under consideration. Four, when there is a decrease in the cost of borrowing. And finally, if there is an overall increase in the buyers’ trust accompanied with optimism for the particular product or service.
Consequently, the outward change in the demand curve gives rise to a shift also referred to as expansion, along the supply curve coupled with an increase in the equilibrium price as well as quantity. In such a case, the suppliers will increase he quantity of their supplies at that higher price, thus gain more from sales. On the other hand, the opposite effects will take place if there is an inward change of demand. It is important to note that, a movement of the demand curve does not influence any change in the supply curve. Ordinarily, demand as well as supply factors are said to be autonomous of each other, even though this assumption is subject to criticism by majority economists.
Market supply and equilibrium price

The supply curve is likely to change outwards due to the following reasons. First, if there is a reduction in the cost of production. Second, if the government intervenes by offering incentives to producers in terms of subsidies, which in one way another cut down the costs per unit offered to the market. Third, with a favorable climate that boosts production levels, especially agricultural produce. Fourth, if there is a redu...

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...nd development.
Establish structures that will encourage more export trade. In this respect a government can support small to medium sized companies engage in export trade by stepping up access to export credit? On the other hand, a government can utilize its policies to assist business to continue being innovative as well as be internationally competitive. Improvement of infrastructure such as communication facilities, road networks among others, forms a good ground for economic growth. Lastly, by empowering its human resources, through equipping them with relevant skills for present and future as well.

Works Cited

Andrew Gillespie. Foundations of Economics. Oxford University Press. 2007.
David Begg, Stanley Fischer and Rudiger Dornbusch. Foundations of Economics. McGraw Hill. 2003.
John Sloman. Essentials of Economics. Financial Times Prentice Hall. 2007

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