Economic Growth

Question 1

What is economic growth

Answer 1

It is the increase in the market value of the goods and services produced by an economy

Question 2

What are the factors which affect GDP

Answer 2

Consumer spending
Investments by firms
Government spending
Net exports

Question 3

What is Nominal GDP

Answer 3

The total market value of goods and services produced by a country.

Question 4

What is Real GDP

Answer 4

Nominal GDP after inflation has been taken into account

Question 5

What is demand led growth?

Answer 5

And increase in AD which leads to an increase in spending. This leads to and increase in AS to meet the new supply leading to an increase in Real GDP

Question 6

What is supply lead growth?

Answer 6

A right shift in supply which increases capacity in the economy which is caused by an increase in the quantity quality and/or mobility of one or more factors of production

Question 7

What shifts aggregate supply right?

Answer 7

-Increasing the size of the labour force
-Increasing the quality of the labour force
-Increasing the quantity of enterprise
-Increasing government spending on infrastructure