Unit 2 - Economic Growth Flashcards

1
Q

What is economic growth?

A

an increase in the long-term productive capacity of the economy.
It is an increase in total output over a period of time using the same or fewer resources.

GDP is commonly used as a measure of economic growth.

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2
Q

How can you increase economic growth?

A

-Growth in the amount of machinery available to produce products
-Growth in the size of the labour force
-Growth in the quality of the labour force
-Technological progress and innovation leading to improvements in productivity
-Reclaiming land

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3
Q

How can growth in the amount of machinery available to produce products be achieved?

A

This can be achieved by encouraging greater investment by firms through subsidies, lower corporation tax and/or low interest rates.

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4
Q

How can growth in the size of the labour force be achieved?

A

The government can achieve this by increasing the retirement age or encouraging labour to come to the UK from other countries.

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5
Q

How can growth in the quality of the labour force be achieved?

A

The government can invest more money in education to improve the quality of the labour force. Moreover, improvements in health and wellbeing will also achieve this.

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6
Q

How can Technological progress and innovation leading to improvements in productivity be achieved?

A

The government can give tax breaks to firms so they invest in this and/or they could subsidise research at universities.

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7
Q

What land would we want to reclaim?

A

This could be from rivers or the sea e.g. Dubai in the UAE created land by building The Palm.

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8
Q

What is the standard of living?

A

Standard of living refers to the quantity and quality of material goods and services available to a given population.

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9
Q

What is the most common way of measuring the standard of living?

A

GDP per capita

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10
Q

What are the issues associated with measuring the standard of living by GDP per capita?

A

-Regional variations in income and spending
-Inequalities in income and wealth
-Leisure and working hours and working conditions
-Changes in life expectancy
-The value of non-marketed output
-Innovation and the development of new products
-Environmental considerations

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11
Q

Other Methods of Measuring Standards of Living?

A

The Human Development Index uses health and education statistics in addition to GDP.
The UN’s Multidimensional Poverty Index uses 10 indicators; including nutrition, sanitation, and access to cooking fuel and water.
Gross National Happiness?

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