Flashcards in Economic Growth and Factors of Production Deck (14):
Standard of living
The goods and services that you can afford.
2 factors that differ Standard of living
1) the size of the family
2) The area you live in
What does "economy" mean?
Describe all the business activity and wealth creation that take place
• Value of your country
• Economic worth of your country
Describe the features of a "booming economy"
∆ Large amount of business activity E.g. Imports & Exports
∆ Jobs generated
∆ Money are spend on goods & services
∆ Banks are happy to lend - they have confident that people will be able to pay their loans
∆ High level of borrowing and lending
Describe the features of a "decline economy"
∆ People save or are more careful with their money
∆ Bank sometimes shut
∆ Economy recession
∆ Unable to pay their loans
What causes economy "booming" or "decline"?
It depends on
1) The country's resources
2) How they are managed
Different economy have different measures of wealth
2 Geographical factors for the economy
All countries do not have the same resources
How do we measure how well we are doing?
E.g. Inflation, employment rate)
Gross Domestic Product
The amount generated by a country's economic activity
The increase in the ability of a country's economy to produce more goods and services
A reduction in the ability of the economy to produce
Advantages of a growing economy
1) More money made
2) Improve Standard of living
3) Higher demand of quality goods & services - create more job opportunities
4) Encourage immigration
5) Ecourage new business
Disadvantages of a growing economy
1) People will not be able to adopt the situation once it collapse
2) False economy, unattainable
3) Small shops might disappear
4) Lending might get out of control, which damage economic activity in the long term
5) Price might increase