Effects of Positive/Negative Economic Growth

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  • Effects of Economic Growth
    • Benefits
      • Living Standars
        • People get paid more
        • Wealth Effect
        • Consumer Confidence
        • No Jobs lost
      • Profit
        • Expand business
        • Business Confidence
        • More Investment
      • Government revenue
        • More tax revenue (Corperation and Income)
        • Less expenditure from benefirs
      • In the long run, Wealth will trickle down into lower incomes
    • Problems
      • Enviroment
        • More Conjestion
        • More Pollution from increased energy consumption
        • Increased use of RM
      • BOP
        • More money means imports from aborad
        • Decrease In exports
          • Firms will target the domestic market
          • Self consumption of goods
      • Inequality
        • The increase in money will not be equally distributed
        • Capitalist Society
        • Inequality is helped by tax (redistributing money through tax and benefits)
      • Inflation
        • Increase in inflation - more uncertainty
        • Decrease in the output gap
      • As the economy approaches full capacity, shortages will occur
  • Recession
    • Inverse of above with these additions
    • Time lag
      • Firms will not make redundancies until we are well into the recession
      • This is because the economy fluctuates


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