Economic Growth

Maya Khangura
Flashcards by , created over 3 years ago

A-Level Economics Macrp (1.1) Flashcards on Economic Growth , created by Maya Khangura on 01/21/2016.

Maya Khangura
Created by Maya Khangura over 3 years ago
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Question Answer
What is Economic Growth? Increase in output of a particular economy
What are the two ways of measuring Economic Growth? (2) 1) Short Run (Actual) 2) Long Run (Potential)
What is short run economic growth? Where a country ACTUALLY produces more than the previous quarter/year
What is long run economic growth? Where a country COULD produce more than the previous quarter/year.
What does economic growth look like on a PPF? ebae2edc-cf09-4738-9a2a-97954b657b46.JPG (image/JPG)
How is Economic Growth measured? (3) 1) GDP Vs GNP 2) Nominal Vs Real 3) Annual Vs Quarterly
What is GDP? (2) 1) Gross Domestic Products 2) Everything produced in a country
What is GNP? (2) 1) Gross National Products 2) Everything produced by businesses 'belonging' to that country
What is Nominal? The basic change in output
What is real? The basic change in output, taking into account INFLATION
What is Annual? Long term statistical figure
What is quarterly? The figure used for analysing current performance
What is the most common measurement? Annual Real GDP per Capita
How do you measure a percentage increase? (difference/original)*100
What are the methods for measuring Economic Growth? (3) 1) Output Method 2) Income Method 3) Expenditure Method
What is the output method? Count the value of all things produced in an economy over a given year
What is the problem with the output method? Counting the same output twice- gives misleading figures (measured once as raw materials and then again as finished goods)
What is the Income method? Count the amount of money paid to all workers in an economy over a given year
What is a problem with the income method? Most people only use income earned in return for providing goods and services not benefits or pensions.
What is the Expenditure method? Count the amount of money spent on goods and services in an economy over a given year.
What is a problem with the expenditure method? (2) 1) Must include exports but not imports 2) Informal economy- very difficult to include/estimate
What is the governments economic growth objective? (3) 1) Steady economic growth 2) No boom and bust 3) Sustainable