MACRO - Short Run Economic Growth

Question 1

Define SREG

Answer 1

actual annual percentage increase in an economy’s output (GDP)

Question 2

What are the assumptions of Short run growth

Answer 2

• there’s been an increase in Real GDP
• more use of existing resources
• no new resources become available

Question 3

Why do we say there’s more use instead of better use

Answer 3

better use suggests LRAS as this relates to the quantity and quality of CELL

Question 4

What are capital goods

Answer 4

goods used to produce other goods

Question 5

Explain what capital goods are when a supplier buys them + the conditions needed

Answer 5

they are still called Capital goods but they must be used to make other goods

Question 6

What are consumer goods

Answer 6

goods bought by households