Economic Growth And The Economic Cycle (1) Flashcards
1
Q
Short run growth
A
An increase in real GDP/capita, by bringing idle resources into production
2
Q
Long run growth
A
An increase in the productive potential of the economy
3
Q
Trend rate growth
A
Output can grow on a sustained basis without putting pressure on inflation
4
Q
Causes of short run growth
A
An increase in any of the components of AD
5
Q
Causes of long run growth
A
An increase in the quality or quantity of factors of production
6
Q
2 factors that affect the quantity of factors of production
A
- Economic stability
2. Labour activity/participation
7
Q
2 factors that affect the quality of factors of production
A
- Investment in physical capital
2. Investment in human capital
