2.5 Flashcards
1
Q
Causes of Economic Growth
A
Improving labour force
Larger labour force
Improved tech
More investment
2
Q
Actual growth
A
Percentage increase in real GDP
3
Q
Potential growth
A
long run expansion of productive potential
4
Q
Export led economic growth
A
countries open their economies to international market for international trade
5
Q
Comparative advantage
A
G+S produced at a lower opportunity cost than another
6
Q
Effects of export led growth
A
Increases AD
Encourages firms to invest by improving supply side of economy
Unbalanced economy surplus on current account
Relies on economic state of other countries
7
Q
Negative output gap
A
Actual level of output < potential level of output - spare capacity
