Economic growth Flashcards
(8 cards)
1
Q
What is Economic growth?
A
Growth in real GDP
2
Q
What is Actual (economic) growth?
A
Increase in real GDP
3
Q
What is Potential (economic) growth?
A
Increase in the maximum productive capacity of the economy
4
Q
What is Productivity?
A
Output per hour of work; total output/total hours worked
5
Q
What is Equity in the distribution of income?
A
Fairness in how income is distributed throughout the population; income should vary according to effort/skill
6
Q
What is Equality in the distribution of income?
A
Everyone earns the same level of income
7
Q
What does Equity ≠ Equality mean?
A
But greater equitability in distribution of income often involves improving the equality of income distribution
8
Q
What is Poverty?
A
Inability to satisfy minimal consumption needs
