3.4 Economic growth and income distribution

Question 1

economic growth

Answer 1

growth in real GDP

Question 2

Actual growth

Answer 2

increase in real GDP

Question 3

potential growth

Answer 3

Increase in the maximum productive capacity of the economy

Question 4

Productivity

Answer 4

Output per hour of work; total output/total hours worked

Question 5

Equity in the distribution of income

Answer 5

Fairness in how income is distributed throughout the population; income should vary according to effort/skill

Question 6

Equality in the distribution of income

Answer 6

Everyone earns the same level of income

Question 7

poverty

Answer 7

Inability to satisfy minimal consumption needs