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Economic Growth (potential growth > actual growth (amount of idle…

- - - - increase in labour force
        
        growth in labour force will lead to an increase in potential output
      - increase in availability of natural resources
      - increase in capital stock: investment in physical capital and economic infrastructure
    - - increase in labour productivity
      - increase in land productivity
      - increase in capital efficiency
- - - - tax concessions
      - tax incentives to encourage foreign investment
      - tax incentives to encourage R&D
    - - building of infrastructure
      - human capital
      - provide greater educational facilities
  - - - changes to AD
- - - - GDP per capita
      - Labour productivity
      - employment
      - healthy-life expectancy
    - - median household incomes
      - poverty rate
      - income Gini
      - wealth Gini
    - - adjusted net saving
      - public indebtedness
      - dependency ratio/ proportion of retirees and youth to working-age population
      - carbon intensity of economic output
- - - - real GDP per capita
      - population demographics
      - poverty and income distribution
      - labour and employment
      - inflation
      - extent of external trade
      - external debt
      - savings
      - military expenditure
      - rate of urbanisation
    - - Physical quality of life index(PQLI)
      - Measure of Economic Welfare(MEW)
      - Human Development Index(HDI)
- - - - economic growth > population growth, higher real income per head. This can lead to higher levels of consumption of goods and services
    - - worker's demands for higher wages are likely to lead to higher inflation etc. Growth in productive potential helps to meet these aspirations and avoids other macro problems that may arise
    - - incomes rise, govt can redistribute incomes from rich to poor as people automatically pay more taxes ( tax rates remain unchanged ). Extra revenues can be spent to alleviate poverty
    - - people become less preoccupied with their own private consumption and more concerned to live in a clean environment as affluence rises
  - - - firms will need to invest more to achieve faster growth. these will take away resources from production of consumer goods to production of capital goods
    - - higher level of consumption --> higher level of production --> higher level of pollution
      - if growth involves using greater amount of resources rather than using same amount of resources more efficiently, some non-renewable resources may run out more rapidly
    - - wages and salaries paid to workers in different industries will increase at different rates.
      - individuals with more sources of income may experience a greater rise in incomes, thus as the rich are likely to have multiple sources of income, the rich get richer
    - - more rapid rate of growth --> more rapid rate of change in production techniques. skills may then no longer be relevant or jobs maybe replaced by machines. thus increased unemployment
    - - increased stress and anxiety level of individuals, excessive pursuit of material growth can lead to greedier, more selfish and less caring society
    - - if investment undertaken growth involves purchasing imported machinery.
      - rising incomes due to economic growth may lead to increased purchases by households on imported consumer goods
      - developing countries dependent on FDI for economic growth may experience a BOP financial account deficit when foreign capital funds flow in, as these represent increase in liabilities
      - LT, part of the profits generated from FDI will also be repatriated back to foreign shareholders, leading to worsening of current account of BOP