Economic Growth

Question 1

What are the 5 causes of economic growth? (Increasing quality/quantity efficiently)

Answer 1

Labour
Land
Capital
Enterprise
Technology

Question 2

What is actual growth?

Answer 2

%change in GDP

Question 3

What is potential growth?

Answer 3

Change in productive potential of the economy over time so the LRAS/PPF shifts
(Productive potential is determined by factors of production

Question 4

What is international trade?

Question 9

What is the trade cycle?

Answer 9

The periodic but irregular up and down movements in economic activity measured by fluctuations in real GDP and other macroeconomic variables.

Question 10

What are the 4 main phases of the trade cycle?

Answer 10

Boom, downturn, recession, recovery

Question 11

What are the 2 types of trade cycle?

Answer 11

Mid trade cycle - GDP does not fall during recessions, just doesn’t grow as much
A more extreme one

Question 12

Why does the trade cycle exist?

Answer 12

Demand and supply shocks
Demand shocks include political issues, change in exchange rates, recession
Supply shocks include trade union action, change in oil prices, change in exchange rates
Shocks can be positive or negative

Question 13

What are the characteristics of a boom?

Question 14

What are the characteristics of a recession?

Question 16

What are the negative impacts of economic growth on consumers

Answer 16

Consumers

Question 17

What are the negative impacts of economic growth on firms?

Question 18

What are the negative impacts of economic growth on the government?

Question 19

What are the negative impacts of economic growth on current and future living standards?