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Economic growth: increase in the real national output of a country over a…
Economic growth: increase in the real national output of a country over a period of time
- high and sustained EG goal
sustainable growth: rate of growth that can be maintained in the LT without creating other significant problems (eg. depleted resources/environmental problems), particularly for future generations
problem of recession
- loss of o/p and welfare
- increased unemployment
- strain on gov budget
- negative outlook
- might cause deflationary spiral
actual growth: rate of growth in actual/real o/p = given by GDP figures
- determined by AD-> unplanned fall in stocks -> stimulates firms to produce more-> higher o/p
- determined by AS-> excess output at current GPL -> fall in prices -> increased HH spending-> increase in Nat o/p
However, cannot ensure high growth over time without an expansion in Yf (bc spare capacity limited)
potential growth: rate of growth of potential o/p (productive capacity)
- determined by QQT of LLCE
quantity: increase in labour force
increase in availability of natural resources
increase in capital stock
quality: increase in labour productivity
increase in land productivity
increase in capital efficiency
tech
if actual growth > potential growth
- amt of idle resources and unemployment reduced
- inflationary pressure build thru higher wages
- excess labour demand -> real wage growth>productivity growth
- unit labour costs increase-> erosion of export competitiveness
- GDP growth moderates towards potential growth
if potential growth>actual growth
- increase in spare capacity and unemployment
- growing gap between potential and actual o/p
inclusive growth: economic growth that creates opp for all segments of pop and distributes the dividends of increased prosperity both in monetary and non-monetary terms, fairly across society
- measured by growth and dvlpment, inclusion, intergenerational equity, sustainability
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economic development: EG accompanied by the qualitative improvement in the SOL. involves changes in the economic, social and political structure of the country
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policies
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AS side policies (education, dvlp infrastructure, R&D)
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