Economic Growth And The Economic Cycle (2) Flashcards
1
Q
2 benefits of economic growth
A
Improved current account
A fall in poverty
2
Q
2 drawbacks of economic growth
A
Inflation - only if growth is short run and if the currency appreciates
Greater consumption of demerit goods - creates employment/tax revenue
3
Q
Economic Cycle
A
Pattern of short term fluctuations in the economic activity that occur over a period of time
4
Q
4 phases of the Economic Cycle
A
- Recovery
- Boom
- Downturn
- Recession
5
Q
Recovery
A
An upswing in the economy
6
Q
Boom
A
The peak of economic activity
7
Q
Downturn
A
Growth is now falling below the trend rate of growth
8
Q
Recession
A
Negative growth for 2 successive quarters
