1.1.1 Economic growth Flashcards
definition of economic growth
an increase in the amount of goods and secures prodigy es per head of the population over a period of time
national income
total value of purpose of goods and secures produced
How to indicate an economic growth
Shown on PPC graph when the point moves from inside to outside shift (using more recourses)
Causes
Discovery of more natural resources
Investment in capital and infrastructure
technical progress
quantity and quality of factors of production
B greater availability
more to satisfy customer needs
increased employment
more opportunities and income, can bring people out of poverty by improving living standards
Increased sales profit
rising output will encourage investment in capital goods, better for long run
Low and stable inflation
if growth and output matches growth and demand
Increase tax revenue
for government which can be invested in public goods and services
D technical progress
can lead to unemployment because capital may replace labour
more people in poverty
Natural resources ruined
need more raw materials
negative externalities such as deforestation health problems and climate change
inflation
if demand is higher than the output
Demand pull
inflation caused by increase in aggregate demand exceeding aggregate supply
cost push inflation
increase in cost of production leading to higher prices
