Economic Growth Flashcards
Budget deficit
Amount at which gov spending is greater than gov revenue
Economic growth
Increase in the level output by the nation
National income
Value of income output or expenditure over a perused of time
Macroeconomic objectives
- Economic growth
- Reducing unemployment
- Protection of the environment
- Controlling inflation
- Balance of payments (current account)
- Redistribution of income
How to measure economic growth
With GDP or GDP per capita
GDP
Market value of all final goods and services produced in a yearly period.
GDP per capita formula
GDP / size of population
Limitations of GDP
- Inflation
- Population changes
- Statistical errors
- Value of home produced goods
- Hidden economy
- GDP and living standards
- External costs
Boom
Peak of the economic cycle where GDP is growing at its fastest
Depression/slump
Bottom of the economic cycle where GDP starts to fall with significant increases in unemployment
Downturn
Period in the economic cycle where GDP grows, but more slowly
Recession
Period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in 2 successive quarters
Explain the four features of the economic cycle
Impacts of economic growth
