Economic Growth- Causes of Growth(All answered)
Ways to show correct answers-LRAS shifting out
-PPF shifting out
-Increase in AD
-Improving labour force
-Improving technology
-more investment
-Capital Deepening- rise is capital stock
Business Cycle correct answersA phenomenon where by GDP fluctuates around its underlying
trend, following a regular pattern.
Output gap correct answersThe difference between actual real and potential real GDP.
Actual growth correct answersPercentage increase in countries real gdp and is measured
annually.
Potential growth correct answersLong run expansion of the economy.
International trade correct answersExport led growth due to comparative advantage( countries
specialise) prices drop and world output increases
Economy is unbalanced as it has a c/a surplus which is not always sustainable and is dependent
on other countries.
Trend growth correct answersLong run average growth rate of an economy. It is the growth rate
that the economy can sustain without inflationary pressure.
Current growth correct answersCaused by an increase in aggregate demand. This draws on the
economy's spare capacity, closing the output gap and brining unemployed resources into use
Productivity correct answersA measure of the efficiency of a factor of production. An increase in
productivity raises aggregate supply and the potential capacity output of an economy, and
contributes to economic growth.
Labour productivity correct answersA measure of output per worker, or output per hour worked
Capital productivity correct answersA measure of output per unit of capital
Total factor productivity correct answersThe average productivity of all factors, measured as the
total output divided by the total amount of inputs used
Investment correct answersExpenditure undertaken by firms to add to the capital stock
Depreciation correct answersThe fall in value of physical capital equipment over time as it is
subject to wear and tear
Ways to show correct answers-LRAS shifting out
-PPF shifting out
-Increase in AD
-Improving labour force
-Improving technology
-more investment
-Capital Deepening- rise is capital stock
Business Cycle correct answersA phenomenon where by GDP fluctuates around its underlying
trend, following a regular pattern.
Output gap correct answersThe difference between actual real and potential real GDP.
Actual growth correct answersPercentage increase in countries real gdp and is measured
annually.
Potential growth correct answersLong run expansion of the economy.
International trade correct answersExport led growth due to comparative advantage( countries
specialise) prices drop and world output increases
Economy is unbalanced as it has a c/a surplus which is not always sustainable and is dependent
on other countries.
Trend growth correct answersLong run average growth rate of an economy. It is the growth rate
that the economy can sustain without inflationary pressure.
Current growth correct answersCaused by an increase in aggregate demand. This draws on the
economy's spare capacity, closing the output gap and brining unemployed resources into use
Productivity correct answersA measure of the efficiency of a factor of production. An increase in
productivity raises aggregate supply and the potential capacity output of an economy, and
contributes to economic growth.
Labour productivity correct answersA measure of output per worker, or output per hour worked
Capital productivity correct answersA measure of output per unit of capital
Total factor productivity correct answersThe average productivity of all factors, measured as the
total output divided by the total amount of inputs used
Investment correct answersExpenditure undertaken by firms to add to the capital stock
Depreciation correct answersThe fall in value of physical capital equipment over time as it is
subject to wear and tear
