Growth Economics

Front 1

Growth economics is concerned with

Back 1

analysing the patterns of long-term trends in an economy's productive capacity and the factors that influence these trends

Front 2

Economic growth is defined and measured in two ways:

Back 2

1) increase in real GDP over time, 2) increase in real GDP per capita over time

Front 3

The supply side of growth is concerned with

Back 3

the physical ability of economy to grow, as growth is attributed to the availability of more and better resources, including stock of technological knowledge

Front 4

The supply side of growth depends on 4 points:

Back 4

1) quantity and quality of natural resources; 2) quantity and quality of human resources; 3) supply or stock of capital goods; 4) technology

Front 5

Aggregate demand is also a cause of growth because

Back 5

given an increase in supply, demand must be adequate to take advantage of the supply increase (demand intersect supply)

Front 6

Resource allocation factors are also a cause of growth because

Back 6

you want some sectors to grow more than others, so demand decides which sectors get allocated what kind of resources

Front 7

A point on the production possibilities curve represents

Back 7

the maximum amounts of production that an economy is able to produce, given that demand is sufficient and allocative efficiency is realised

Front 8

A point inside the production possibilities curve represents

Back 8

a failure to achieve full employment and full production

Front 9

Productivity is

Back 9

output per hour of work

Front 10

Productivity growth is

Back 10

the percentage increase in productivity from one year to the next