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13 Cards in this Set
- Front
- Back
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Actual economic growth |
Increase in real GDP |
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Potential economic growth |
Increase in long run productive capacity of economy |
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Export led growth |
Economic growth caused by an increase in net exports |
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Output gap |
Difference between real and potential output |
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Negative output gap |
Actual output is below potential output |
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Positive output gap |
Actual output is above potential output. Economy is growing faster than trend |
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Economic cycle |
Constant repeat of boom-slump-recession-recovery-boom |
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Boom |
A period of time when the growth rate exceeds the potential growth rate |
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Recession |
Two consecutive quarterly falls in GDP |
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PPP |
Purchasing Power Parity- GDP adjusted to what that currency could buy when changed into local currencies |
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National Happiness index |
Concept that measures quality of life in more rounded and psychological terms than only using GDP |
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Easterlin paradox |
Increase in income will increase our happiness until we have our basic needs, after this happiness is not likely to increase |
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5 limitations of using GDP as measure of growth |
-subsistence economy -informal economy -income distribution -nature of spending -real incomes |
