Pages in this set

Page 1

Preview of page 1
Economic Growth
What is economic Growth?

Economic growth is the percentage increase in real national output (real GDP) in a time period of
sustained increase of productive potential of an economy. Countries grow at different rates, this is
because they are at different stages in the economic cycle.

How do…

Page 2

Preview of page 2
3. Exchange Rates: Market exchange rates fluctuate a lot, also GDP includes all goods/services
in an economy regardless of their impact on living standards. Purchasing Power Parity must
be used to convert currencies. PPP involves comparing the same basket of goods/ services
in both countries.

Main advantages of Economic Growth:…

Page 3

Preview of page 3
A lack of AD e.g. maybe due to the lack of investment or lack of confidence in the economy
and/or higher interest rates defers borrowing.
Supply Side Shock e.g. there could be higher energy prices shifting AS left, so there are
higher prices and less output.

What are the reasons…

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »