ECONOMIC GROWTH Flashcards
Gross Domestic Product (GDP)
Market value of all final goods and services produced within a country in a given time period
Two ways GDP can be measured
- The total dollar value of what consumers purchase in the economy
- The total dollar value of what producer produces in the economy
GDP Deflator
A price index measuring the
average prices of all goods and services produced
in an economy
GDP is a critical measurement of an economy’s…
Size, performance, and general health
Why do we trade?
Differences in resource endowment, preferences, productivity, Opportunity Costs
Absolute Advantage
if a country uses fewer
resources to produce a good
Comparative Advantage
if a country produces a
good at a lower cost in terms of other goods
Import Quota
A limit on import of a good
Tariffs
A tax levied on imports
Trade Balance
Trade deficit if import > export and Trade surplus if import < export
Economic Growth means______ in GDP
Increase
What causes economic growth?
Technology, Physical Capital, Human Capital, Others: resources, legal-institutional environment
