Macroeconomic issues (EG)

Question 1

EG is the…

Answer 1

increase in real output as measured by the change in real GDP from one period to another

Question 2

high rate of EG will lead to…

Answer 2

higher SOL and employment

Question 3

what is AG

Answer 3

percentage annual increase in national output over a period of time

Question 4

AG leads to…

Answer 4

increase in income levels and greater employment thus increasing MSOL

Question 5

PG is..

Answer 5

the increase in economy’s potential output

Question 6

PG leads to a ________ shift in AS curve

Answer 6

rightward since PG = increase in productive capacity

Question 7

sustainable growth =

Answer 7

AG + PG taking consideration for environmental impact

Question 8

inclusive growth =

Answer 8

growth that is sustained over period of time and is broad based across economic sectors

Question 9

cause of undesirable rates of EG

Answer 9

1. fall in AD
2. rapid rise in AD
3. insufficient resources to sustain growth

Question 10

how is DPI caused

Answer 10

when rise in AS > rise in AD, GPL rises

Question 11

negative growth effect

Answer 11

economy at lower level of output
less derived dd for labour, fall in wage and reduce PP thus MSOL fall

Question 12

slow and low growth effect

Answer 12

instils pessimism cause fall in C & I, fall in AD and MULTIPLIED fall in GDP thus fall in SOL

Question 13

rapid high growth effect

Answer 13

1. INFLATION
2. structural unemployment since sunset industries expand