economic growth Flashcards
actual growth
real output has increased
actual growth caused by in graph ?
increase in components of AD
inrease in SRAS
what is export led growth
if exports rise for any economy
limitations of export led growth
overreliance makes u sensitive to the downturn in global economy
causes of potential growth 4
domestic investment and fdi
innovation
growth in size of labor force
degree of competition
what graph used to show potential growth
ppc
causes of short run growth rate changes
demand side shock
supply side shock
examples of demand shock
market bubbles may crash
central bank may increase interest rates suddenly
government may sharply raise taxes
examples of supply side shocks
any sudden cost of production rise
actual growth rate vs long term trends in growth
- Long-term trends in growth refer to the average rate of economic expansion an economy can expect over a sustained period
- actual growth rate refers to the percentage change in real Gross Domestic Product
costs of growth 4
opportunity costs
environmental costs
increased inequality
inflation
henefits of growth 4
higher living standards
higher employment
increased tax revenues
higher levels of investment
