Economic Growth Causes
- Created by: gurjinderrai
- Created on: 14-04-14 11:15
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- Economic growth
- the % increase in goods and services produced by the economy
- Causes (actual growth)
- Investment in physical (machinery) and human (workers) capital
- Net Investment - enlarges physical and human capital
- Technical Progress - better quality of capital goods (machinery) - increase capital productivity - higher labour productivity
- Increase consumer confidence - more consumption (vice versa)
- Increase gov spending - increase AD (vice versa)
- Increase AS - production costs fall - more competitiveness - cheaper/deregulation - more consumption
- Investment in physical (machinery) and human (workers) capital
- Short run makes use of spare capacity and takes up slack in the economy
- Long run increases total productive capacity
- Measured
- GDP
- GDP
- Causes (potential growth)
- Only occurs when AS increases - economy output increases
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