Unit 2, AOS1 Economic Growth and GDP + impacts on LS

Question 1

Economic Growth

Answer 1

The rate at which economic activity grows over time.
Determined by the changes in the real level of production from one year to the next.
Measured by GDP.

Question 2

GDP (Gross Domestic Product)

Answer 2

The final value of the g/s produced during a specific period of time (year).
GDP per capita= the GDP divided by the size of the pop. ->changes in MLS.
GDP= C+I+G+(x-m)

Question 3

What does a rise in GDP indicate?

Answer 3

There has been an increase in final market value of g/s produced over time (could be due to inflation+ bad).

Question 4

Nominal vs Real GDP

Answer 4

Nominal GDP: measures a country’s GDP using current prices, without adjusting for inflation.

Real GDP: measurement of economic output that accounts for the effects of inflation or deflation.

Question 5

Living Standards

Answer 5

Material Living Standards: LS measured by access to g/s.

Non-Material Living Standards: aspects of a person’s quality of life that can not be measured by monetary factors.

Question 6

Effects of an increase in Economic Growth on N&MLS

Answer 6

Economic growth: Increased prod, income and expenditure.

Material LS: increase b/c increased access to g/s due to inc. income to purchase + inc. prod -> more g/s.

Non-Material LS: ppl have jobs-> decr. stress about money, lower crime rates, inc. access to healthcare and education, increased quality of g/s.