University of duhok

College of engineering
Mechanical department

Engineering Economics Assignment

Assignment Name: Factors affecting economics

Supervised by:

Mrs: shang asmat

Prepared by: Sufian Salim Qasim

Factors affect the economic
Economic growth can be defined as a positive change in the level of goods and
services produced by a country over a certain period of time. An important
characteristic of economic growth is that it is never uniform or same in all sectors of
an economy. Economists generally agree that economic development and growth are
influenced by five factors: human resources, natural resource, capital formation,
technology and political factors. Highly developed countries have governments that
focus on these areas. Less-developed countries, even those with high amounts of
natural resources, will lag behind when they fail to promote research in technology
and improve the skills and education of their workers.

1. Human Resource: The skills, education and training of the people have a direct
effect on the growth of an economy. A skilled, well-trained workforce is more
productive and will produce a high-quality output that adds efficiency to an
economy. An example to this is china they have well education and awareness so
in the future they become good creative thinking.
2. Natural Resources: Natural resources help to provide the best economy by
exporting them to neighboring countries through the people's awareness and
strong thinking for the growth of the economy and tourism places of the most
important things to help the growth of the economy An example of this oil and its
derivatives On the other hand, the economy can be negatively affected by oil,
because it leads to war and political problems constantly. Kuwait is an example of
this. Almost all of the country has received positive income from oil.
3. Capital Formation: On the contrary, capital formation refers to increasing the
stock of real capital which obviously helps in raising the level of production of
goods and services. Therefore, the essence of the process of capital formation is
the diversion of a part of society’s currently available resources to the possible an
expansion of consumable output in future.
4. Technological Development: Another influential factor is the improvement of
technology. The technology could increase productivity with the same levels of
labor, thus accelerating growth and development. This increment means factories
can be more productive at lower costs. Technology is most likely to lead to
 sustained In the long-run development of new technology is a key factor in
enabling improved productivity and higher economic growth.
5. Social and political factors: This is also one of the reasons for the growth of the
economy by concluding successful deals and dealing with countries in a
successful political manner, as well as dealing with the huge state funds in a
strategic way and successful investments. On the other hand we have traditions,
temples and attractions An example of the United States has the most successful
government in the world and gets huge sums of money because of its strong
politics On the religious side, however, Saudi Arabia also gets significant money
and helps the economy in a positive way.