5. economic growth

Question 1

causes of growth

Answer 1

-land
-size and quality of workforce
-capital
-enterprise
-technological progress
-efficiency

Question 2

actual growth

Answer 2

the percentage change in GDP

Question 3

potential growth

Answer 3

change in productive potential over time

Question 4

where has export lead growth been used

Answer 4

china, germany and japan

Question 5

output gap

Answer 5

the difference between the actual level of gdp and the estimated long-term level

Question 6

characteristics of a boom

Answer 6

-national income is high
-positive output gap
-high consumption+investment
-high tax revenue
-high imports

Question 7

recession characteristics

Answer 7

-high unemployment
-low inflationary pressure
-low consumption + investment

Question 8

impacts of economic growth on consumers

Answer 8

-inflation
-positive wealth effect
-higher quality goods
-increased happiness
-increased inequality

Question 9

impacts of economic growth on firms

Answer 9

-investment
-animal spirits
-higher profits
-opportunity

Question 10

impacts of economic growth on government

Answer 10

-increased tax revenue
-living standard rise
-reduced budget deficit

Question 11

impacts of economic growth on current and future living standards

Answer 11

-inflation
-lower poverty
-more goods and services for people to enjoy
-housing standards and the quality of food
-increased government spending
-possible higher inequality