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
2
Q
What are the four factors of production?
A
Land, Labour, Capital and Enterprise
3
Q
Land increasing economic growth and LRAS:
A
- Discovery of new resources
4
Q
Labour increasing economic growth and LRAS: (2)
A
- Size of the workforce
- Quality of the workforce
5
Q
How does the size of the workforce increase?
A
- Immigration
- The more people of working age
- Raising retirement age
- Provide free childcare
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
7
Q
Capital increasing economic growth and LRAS:
A
- New technology
-
8
Q
Enterprise increasing economic growth and LRAS: (2)
A
- Governments offer tax benefits or grants
- Lower wealth distribution
9
Q
Actual Growth:
A
Percentage change in GDP
10
Q
Potential growth:
A
is the change in productive potential of the economy over time, so the LRAS or PPF curve shifts
