2.5 Whiteboard Tasks

Question 1

How can a rise in an economy’s factors of production lead to actual economic growth?

Answer 1

Increased CELL will shift AS to the right, which may cause actual economic growth

Question 2

What is export-led growth?

Answer 2

Improving the quality or quantity of resources to increases demand from overseas customers.

Question 3

What are the four factors of production and how do they lead to potential economic growth?

Answer 3

Capital, Enterprise, Land, Labour (CELL)
Increased CELL improves an economy’s productive capability, improving the quantity or quality of its resources, leading to long-run economic growth.

Question 4

What does a rise in CELL on both Keynesian and Classical diagrams look like?

Answer 4

Look at word document

Question 5

What does a rise in Cost of production on both Keynesian and Classical diagrams look like?

Answer 5

Look at word document

Question 6

What do negative and positive output gaps look like on a graph?

Answer 6

Word document

Question 7

What does the business trade cycle look like?

Answer 7

Word

Question 8

What does the Trend GDP illustrate on the business trade cycle?

Answer 8

Illustrates the change in productive capability. How much the economy can grow without inflationary pressure.

Question 9

What does the Actual GDP illustrate on the business trade cycle?

Answer 9

The actual rate of change in GDP in an economy. This can be greater or less than Trend GDP.

Question 10

What do Positive Output Gaps look like on the Business Trade Cycle?

Answer 10

The peaks on the business trade cycle

Question 11

What do Negative Output Gaps look like on the Business Trade Cycle?

Answer 11

The troughs on the business trade cycle

Question 12

What are the characteristics of a recession?

Answer 12

-High RGDP
-Lower Unemployment
-Positive Output Gaps
-Higher Tax Revenue
-Lower Welfare Payments
-Inflationary Pressure
-Worse Current Account
-Increased Externalities

Question 13

What are the characteristics of a boom?

Answer 13

-Falling RGDP
-Rising Unemployment
-Negative Output Gaps
-Lower Tax Revenue
-Rising welfare payments
-Disinflationary pressure
-Improved Current Account
-Reduced Externalities

Question 14

What are the benefits and drawbacks of economic growth to consumers?

Answer 14

Benefits:
-More goods and services to consume
-Higher Material Wellbeing

Drawbacks:
-Inflationary Pressure

Question 15

What are the benefits and drawbacks of economic growth to firms?

Answer 15

Benefits:
-Higher Revenue and Profit
-Capital to Reinvest

Drawbacks:
-Rising Wages

Question 16

What are the benefits and drawbacks of economic growth to the government?

Answer 16

Benefits:
-Higher Tax Revenue
-Lower Welfare Payments

Drawbacks:
-Negative Externalities

Question 17

Define standards of living

Answer 17

The degree of wealth and material comfort available to a person or community

Question 18

What are the benefits and drawbacks of economic growth to standards of living

Answer 18

Benefits:
-Economic Growth can increase material wellbeing

Drawbacks:
-Increases stress of work and causes negative externalities lowering Quality of life

Question 19

What are the 7 key economic targets?

Answer 19

-Economic growth
-Redistribution of Income (Income Inequality)
-Unemployment
-Inflation
-Balance of payments
-Budget
-Externalities