economic growth

Question 1

Define Economic Growth

Answer 1

Economic growth is a long-term expansion of the productive potential of the economy

Question 2

State some problems with using GDP for ECONOMIC GROWTH

Answer 2

with economic growth,There may be more 
pollution,
 congestion,
stress levels
 inflation-cause AD ^e. If aggregate demand increases faster than the increases in aggregate supply, then there will be an excess demand but a shortage in supply in the economy. Hence, producers will ^price.=inflation

Question 3

Issues with using GDP?

Answer 3

• Doesnt include unofficial ‘black market’ work which people wont announce in order to claim more benefits etc
• Doesnt include income inequality across society
• The failure to account for the costs imposed on human health and the environment of negative externalities arising from the production or consumption of the nation’s output

Question 4

Benefits of economic growth?

Answer 4

1)More disposable income>more consumption
2)Government gets fiscal dividend (more tax)
3)

Question 5

Evaluation points to consider for economic growth?

Answer 5

1) How sustainable is it(we want growth wo/ inflation,env effect etc)
2) how inclusive-will everyobydb benefit not jus those in one dominant sector.
3) balanced growth- we want growth from loads of different sources

Question 6

What is GDP

Answer 6

GDP measures the value of all final goods and services produced across an economy over a time period

Question 7

What are some measures of economic performance?(topics)

Answer 7

Unemployment
rate of inflation/growth
balance of payments

Question 8

causes of economic growth

Answer 8

• lower interest rates>chaper to borrow to investment
• lower income tax
• higher goverment spending

Question 9

impacts of economic growth on consumers

Answer 9

-There will be an increase in demand for housing as people have more money and so
>, which will increase house prices>. The rising prices of housing will increase wealth and
lead to positive wealth effect.
● Improved productive efficiency due to better technology could lead to lower prices
or higher quality goods.
increased happiness for those on very low income

Question 10

impacts of economic growth on living standards

Answer 10

Economic growth will result in lower poverty levels . An increase in the production of
goods and services will increase jobs so there will be less unemployment and less
people on benefits. Wages are also likely to increase.
● There will be more goods and services for people to enjoy , so the poor will be
able to get the goods and services they need instead of only the rich getting what
they want.
● Housing standards and the quality of food increases due to economic growth.
Health also tends to increase: not only does life expectancy rise but people have a
higher quality of life in their old age.
● Increased government spending will l