MGTA03 October 2006 Mid_Term – Model Answers
What are the benefits of a growing economy?
In a growing economy, more goods, and more new goods, are produced. This
means that people should have enough of basic goods, and have new goods that
they have not purchased before.
As well, productivity should be rising, so people (workers especially) have
more income to purchase the new goods.
A growing economy also employs more people, which gives workers more
income to purchase goods.
People can therefore purchase more, and this tends to raise the standard of
More thoughtful answer includes the above, and:
The government can then tax more, as people and businesses have more
income. This means the government has more money to spend on social goods
such as infrastructure (roads, hospitals, schools) and social programs to help
those who cannot enjoy the benefits of working.
Very thoughtful answer adds:
A growing economy will have a more lively international trade, with imports
from lower-cost jurisdictions giving consumers more to choose from. Exports
also increase, which means money flowing into the country and a positive
balance of payments. Question 2
Explain why a partnership agreement is normally considered to be a good thing
to have in a partnership
A partnership agreement lays out the procedures and agreements in case of
disputes arising between partners. Potential disputes could arise over: “who has
responsibility for what?”, “How much does each partner take in salary and/or
profits?”, “what procedures need to be followed if one or more partners wish to
withdraw from the firm”, “how do we settle disputes”. A well managed