Unit 4 Economic growth Flashcards
What is the definition of economic growth
When the total amount of goods and services produced or sold increases over a period of time
What is the definition of GDP (gross domestic product)
A measure of the value of all good and services produced or sold over a period of time
Why does economic growth happen
Investment in new machines means that processes are more effective and efficient so more can be produced.
More educated people will be more productive so more valuable products move faster.
Investment in infrastructure means we can move most educated people around a country so more efficient broadband and transport.
What is the definition of GDP per capita
Total GDP ÷ total population
What are the drawbacks of GDP
A country with high GDP is good on face value but if the country has a very large population means the GDP per capita will be very low.
What is the distribution of Income
And country may have a high GDP but income may be spread out to different people
What is included in the Human Development Index
Accessibility of health care/ education, Standard of health care/ education GDP per capita Life expectancy Infant mortality rate Literacy rate Number of years in education provided by the state.
What are the benefits of economic growth
Extra income for the economy as it still affects and benefits at least one person
It can allow infrastructure to develop.
What are the drawbacks of economic growth
Puts pressure on natural resources Non renewable sources are running out Pollution to the environment Social costs to historical sites Future generations may have no resources
What does the development of infrastructure allow
The economy to limit the damage caused by further economic growth
Provides the economy with transport links to trade
Gives the economy strength to overcome an economic shock
What is the definition of sustainable growth
A level of economic growth that meets both the needs of current generations and future generations by preserving the environment
How is sustainable growth achieved
By using renewable energy sources
Re planting trees to provide a sustainable amount of wood and paper
Solar, wind, hydroelectric and biomass could replace gas and oil.
What are the limiting factors of sustainable growth
Investing in technology is expensive
Not all resources (gold, metal, stone and diamond ) are renewable and contribute to standard of living
An increase in population puts strain on renewable resources as it is difficult to find substitutes because they are being used up quickly.
Producing renewable resources can cause harm to the environment and local ecosystems.
What is a basic business responsibility
The basic responsibilities of a business to its stake holders.
What are examples of basic responsibilities
Minimum wage, no discrimination, hygiene levels and suitable working conditions
