Economic growth and economic cycle

Mind Map by callum_j.smith, updated more than 1 year ago
Created by callum_j.smith over 6 years ago


A2 Economics Mind Map on Economic growth and economic cycle, created by callum_j.smith on 05/13/2015.

Resource summary

Economic growth and economic cycle
  1. definition = the increase in the economy's productive potential
    1. measured using Real GDP or potential GDP
    2. Output gap = difference between actual level of GDP and estimated trend value
      1. + output gap = actual growth rate above trend
        1. more confidence in the economy
          1. high investment
            1. shortages of supply e.g. labour
            2. - output gap = actual growth under trend
              1. downswing of the economy
                1. 2 successive quarters of negative growth
                  1. falling demand
                    1. closure of firms
                      1. high unemployment
                    2. Factors which influence Growth rate
                      1. resources
                        1. investment in labour force
                          1. technology
                            1. capital goods
                              1. savings
                              2. government policies
                                1. promote education
                                  1. promote mobility of factors of production
                                    1. supply-side policies
                                      1. remove barriers to labour market flexibility
                                        1. cut taxes
                                          1. improve job information flows
                                          2. promote R&D
                                            1. promote savings
                                            2. problems of economic growth
                                              1. causes external costs e.g. Pollution
                                                1. unfair distribution of income and wealth
                                                  1. may be unsustainable
                                                  2. reasons for the economic cycle
                                                    1. multiplier and accelerator effect
                                                      1. political
                                                        1. Inventory stock cycle
                                                        Show full summary Hide full summary


                                                        Economics - unit 1
                                                        Amardeep Kumar
                                                        Using GoConqr to study Economics
                                                        Sarah Egan
                                                        Emily Fenton
                                                        The Weimar Republic, 1919-1929
                                                        Globalisation Case Studies
                                                        Sociology: Crime and Deviance Flash cards
                                                        Beth Morley
                                                        Random German A-level Vocab
                                                        Libby Shaw
                                                        AN ECONOMIC OVERVIEW OF IRELAND AND THE WORLD 2015/16
                                                        John O'Driscoll
                                                        Functionalist Theory of Crime
                                                        A M
                                                        Realist Theories
                                                        A M
                                                        Jessica Phillips