Economic Growth And The Exonomic Cycle

Question 1

What is economic growth?

Answer 1

Refers to the sustained increase in production of goods and services within an economy over time

Question 2

What economic growth also be defined by?

Answer 2

A long-run increase in a country’s productive capacity/ potential national output.

Question 3

Benefits of economic growth?

Answer 3

• Raise living standards and improve people’s welfare
• Fiscal dividend - tax revenues generated by economic growth improve economic welfare
• generate a virtuous cycle = greater business confidence = even more investment in technology = greater international competitiveness = higher growth

Question 4

More benefits of economic growth?

Answer 4

• It helps some countries to get out of poverty
• enhanced capacity for economy and the people to develop other aspects of quality of life, e.g environmental, cultural, social