Macro aims

Question 1

Define sustained EG

Answer 1

postive, non-inflationary EG
expansion of its potential growth (LRAS) is in tandem with actual positive growth (increase in AD)

i.e increase in RNY with a small increase in GPL

Question 2

Define sustainable EG

Answer 2

rate of growth of real GDP that can be maintained without creating other significant economic problems (such as environemntal problems and depleted resources) particularly for future generations

Question 3

Define economic growth

Answer 3

the increase in the country’s real national income over a period of time

Question 4

Define inclusive EG

Answer 4

EG that takes income distribution into consideration and does not contribute to worsening income inequality, hence ensuring that EG benefits everyone in the country

brings about broad-based benefits on the population SOL

Question 5

Define potential EG

Answer 5

rate at which an economy could grow without causing inflation over a period of time

i.e improvement in a country’s productive capacity

Question 6

Define standard of living (SOL)

+ material and non-material terms

Answer 6

the quality of life enjoyed by individuals in a country, measured in material and non-material terms

material SOL : reflected by the amount, quality of goods and services the individuals in a country can enjoy

non-material SOL : factors not reflected in national income statistics, such as healthcare, education and environmental conditions within the country

Question 7

Define actual EG

Answer 7

the rate of change in its national income

Question 8

is GDP = RNY?

Answer 8

NO!
GDP = monetary value of total production of goods and services in a geographical boundary given a period period of time
RNY = real national income earned by indivuals in a country and is measured by GDP