2.5.1 Causes of growth

Question 1

Actual / Short run growth

Answer 1

A rise in real GDP in a given time period

Question 2

Long run growth

Answer 2

The trend growth rate – mainly determined by changes in the stock of available factor inputs and also improvements and productivity

Question 3

Net inward migration

Answer 3

when the number of migrants coming into a country is higher than those leaving in a given time period

Question 4

Output measure GDP

Answer 4

value of the goods and services produced by all sectors of the economy in a given time period

Question 5

Potential growth

Answer 5

arise in the productive potential or the capacity of the economy. It is not yet actual growth until AD rises up to use that extra capacity.

Question 6

Production

Answer 6

value of output of goods and services e.g. measured by GDP

Question 7

Productive potential

Answer 7

Productive capacity of the economy

Question 8

Productivity

Answer 8

output per worker

or

output per unit of input

Question 9

Seasonal adjustments

Answer 9

any variability from seasonal influences which made distort the data has been removed

Question 10

Economic shocks

Answer 10

An unexpected or an unpredictable event that affects the economy

Question 11

Short run economic growth

Answer 11

growth in the output of a country in terms of GDP over a given period of time

Question 12

Sustainable growth

Answer 12

growth that meets the need of the present without compromising the ability of future generations to meet their own needs

Question 13

Trend growth

Answer 13

The long run average growth rate - mainly determined by changes in the stock of available factor inputs and also improvements in productivity

Question 14

Exogenous shock

Answer 14

an unexpected event behind the control of the country’s officials that had a large negative impact on its economy