3.1 Economic growth Flashcards
What does the term ‘economic growth’ mean?
Growth in GDP (value of output) over time.
What does the term ‘Gross Domestic Product (GDP)’ mean?
The total value added of goods and services produced in the country in a year.
How is the ‘rate of growth’ calculated?
change in GDP
———————- x 100
original GDP
What does the term ‘GDP per capita’ mean?
GDP divided by the population (and is typically used to measure standard of living).
What does the term ‘boom’ mean?
A period of high economic activity and high levels of employment.
What does the term ‘recession’ mean?
A period of time when the country’s GDP falls for two (or more) consecutive quarters.
What are the determinants of economic growth?
- Investment
- Changes in technology
- Education and training
- Labour productivity
- The size of the workforce
- Natural resources
- Government policies
What does the term ‘labour force (or workforce)’ mean?
The number of people who work in a country.
What are the benefits of economic growth?
- A rise in material living standards
- A reduction in poverty
- A rise in the welfare of the population
- A rise in employment and a fall in unemployment
What are the environmental costs of economic growth?
- Pollution
- Global warming
What are the economic costs of economic growth
- Inflation
- Congestion
- Loss of non-renewable resources
What are the social costs of economic growth
- A lower quality of life
- Inequalities of income and wealth
