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Economic Growth (Costs (Opportunity Cost, Environmental Costs, Income Re…
Economic Growth
Costs
Opportunity Cost
Environmental Costs
Income Re-distribution
Unemployment
Social Effects
BOP deficit
Actual Growth
rate of growth of real output
Short Run
growth in AD
increase in SRAS
Long Run
restricted to growth of potential output
Effects
GDP growth moderates towards potential growth
unit labour costs increase
inflationary pressures
reduction in idle resources and unemployment
Causes
Supply Side Factors
Quality
Increase in Labour Productivity
Increase in Land Productivity
Increase in Capital Efficiency
Quantity
Increase in Labour Force
Increase in Availability of Resources
Increase in Capital Stock
Technology
Demand Side Factors
C I G (X-M)
Structural Factors
External Factors
Potential Growth
rate of growth of potential output
Long Run (LRAS)
determined by QQT
Effects
increase in spare capacity
increase in unemployment
Inclusive Growth
Growth and Development
Inclusion
Intergenerational Equity and Sustainability
Benefits
avoids macroeconomic problems
redistribution of income
Environmental Benefits
Policies
Fiscal Policy
Encourage Investment
Encourage Technological Improvements
Monetary Policy
Measurements
Increase in GDP
(Nominal GDP/GDP Deflator) x100
Economic Development
Measurement
Economic Indicators
Non Economic Indicators
Physical Quality of Life Index
Measure of Economic Welfare
Human Development Index
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