Explain the impact on economic growth on the followingscenarios....? Twice as ma

Question

Explain the impact on economic growth on the followingscenarios....?

Twice as many trained workers are permitted to immigrate to theUnited States as in the past. Explain the impact on economicgrowth.

After a report that saving in the United States is at an all timelow, jeopardizing many family's retirement plans, Americans beginto save in an effort to ensure they are not the ones without theability to retire.


Congress votes to halt all oil drilling in the Gulf of Mexico.

Disposable income of Americans decreases along with their savingsrate.

The board of directors at Millco announces plans to build six newregional factories in the United States that will produce capitaland consumer goods for the entire western hemisphere.

Explanation / Answer

Explain the impact on economic growth on the followingscenarios....? Twice as many trained workers are permitted to immigrate to theUnited States as in the past. Explain the impact on economicgrowth. This would cause overall economic growth due to theincrease in resources (or graphically, it shifts the ProductionPossibilities Frontier curve outward). After a report that saving in the United States is at an all timelow, jeopardizing many family's retirement plans, Americans beginto save in an effort to ensure they are not the ones without theability to retire. This would not effect economic growth, however it placeseconomic production at an inefficient point - due to no fullyutilizing resources - but, this also depends on the opportunitycost of saving - if it causes the economic benefit to be less thanzero then this statement holds, if it causes economic benefit to beequal to or greater than zero then the increase in saving is notharmful. The more likely case is the former - and graphicallythis could represented as a point within the PPFcurve. Congress votes to halt all oil drilling in the Gulf of Mexico. This would give an opposite effect as the immigrationscenario - due to a reduction in resources. Disposable income of Americans decreases along with their savingsrate. This seems like it would depend on what happened to thatdisposable income. The board of directors at Millco announces plans to build six newregional factories in the United States that will produce capitaland consumer goods for the entire western hemisphere. This would cause a movement along the PPF curve with apoint landing closer to capital than to necessities, withoutchanging economic growth itself - it is simply a reallocation ofresources (assuming all else equal other than this investment andproduction decision).

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