Theme 2 Continued

Question 1

Economic growth definition

Answer 1

The rate gross domestic product (GDP) of a country changes over a year. Measures changes in output.

Question 2

Trend growth definition

Answer 2

The estimated rate of growth of a nations productive potential

Question 3

Nominal growth definition

Answer 3

Growth with inflation

Question 4

Real growth

Answer 4

Growth without inflation

Question 5

Advantages of economic growth

Answer 5

• more tax revenue
• less unemployment
• more entrepreneurship
• higher standards of living

Question 6

Disadvantages of economic growth

Answer 6

• less sustainability
• greater stress on workers
• ignores the black market

Question 7

Frictional unemployment

Answer 7

Out of work due to personal short term unemployment

Question 8

Structural unemployment

Answer 8

Skills are no longer relevant

Question 9

Cyclical unemployment

Answer 9

Economic reasons

Question 10

Seasonal unemployment

Answer 10

Parts of the year when there is no work in your job

Question 11

Balance of payments definition

Answer 11

Measures all international economic transactions between the uk and it’s trading partners

Question 12

Capital account definition (positive value)

Answer 12

Purchase and sale of fixed assets such as real estate

Question 13

Current account definition (a negative value)

Answer 13

• net exports (imports and exports)
• net income (investment from overseas)
• net transfers (sums sent home to migrant families)

Question 14

Financial account definition (always a positive value)

Answer 14

• FDI (building factories)
• net portfolio investment (savings and bonds)
• other financial items (hot money)