3. Economic Flow Flashcards
1
Q
What is the order of an Economic Flow?
A
Boom-Recession-Slump-Recovery
2
Q
What is a ‘Boom’?
A
The strong period of economic growth that tends to precede a recession.
3
Q
What is a ‘Recession’?
A
When growth is negative for 2 successive quarters
4
Q
What is a ‘Slump’?
A
A slump is the bottom of a recession. An extended slump is called a recession.
5
Q
What is a ‘Recovery’?
A
A recovery follows a slump.
6
Q
What is ‘Trend Growth’?
A
The trend rate of growth is the average sustainable rate of economic growth over a period of time. For example, in the UK, the trend rate has tended to be about 2.5%.
7
Q
What factors affect Trend Growth?
A
- The size of the labour force
- Natural Resources
- Capital Stock
- Human Capital
- Technology
- Productivity
