Chapter 29: Economic growth

Question 1

Gross domestic product (GDP)

Answer 1

The total output of a country

Question 2

Circular flow of income

Answer 2

The movement of expenditure, income and output around the economy

Question 3

Value added

Answer 3

The difference between the sales revenue received and the cost of raw materials used

Question 4

Transfer payments

Answer 4

Transfers of income from one group to another not in return for providing a good or service

Question 5

Nominal GDP

Answer 5

GDP at current market prices and so not adjusted for inflation

Question 6

Real GDP

Answer 6

GDP at constant prices and so adjusted for inflation

Question 7

Subsistence agriculture

Answer 7

The output of agricultural goods for farmers’ personal use

Question 8

Recession

Answer 8

A reduction in real GDP over a period of six months or more

Question 9

International Monetary Fund (IMF)

Answer 9

An international organisation which promotes international cooperation and helps countries with balance of payments problems

Question 10

Sustainable economic growth

Answer 10

Economic growth that does not endanger the country’s ability to grow in the future