2.5.1 Causes of Growth Flashcards

1
Q

What needs to happen for economic growth to occur?

A

An increase in the quality or quantity of one of the four factors of production

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2
Q

What are the four factors of production?

A

Land, Labour, Capital and Enterprise

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3
Q

Land increasing economic growth and LRAS:

A
  • Discovery of new resources
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4
Q

Labour increasing economic growth and LRAS: (2)

A
  • Size of the workforce

- Quality of the workforce

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5
Q

How does the size of the workforce increase?

A
  • Immigration
  • The more people of working age
  • Raising retirement age
  • Provide free childcare
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6
Q

How does the quality of the workforce increase?

A
  • Education; less likely to suffer from structural unemployment as they will have greater occupational mobility
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7
Q

Capital increasing economic growth and LRAS:

A
  • New technology

-

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8
Q

Enterprise increasing economic growth and LRAS: (2)

A
  • Governments offer tax benefits or grants

- Lower wealth distribution

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9
Q

Actual Growth:

A

Percentage change in GDP

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10
Q

Potential growth:

A

is the change in productive potential of the economy over time, so the LRAS or PPF curve shifts

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