Please enable JavaScript.
Coggle requires JavaScript to display documents.
2ec2p group 4
EG - Coggle Diagram
2ec2p group 4
EG
Problems of recession
-
Negative economic outlook > lack of confidence > C,I falls > further fall in output
-
AD fall > GPL fall> Consumers expect price to fall further > withhold spending now to purchase goods at a later time at lower prices > deflationary spiral
-
-
Policies to encourage EG
Fiscal policy
Encourage investment via tax concess, govt expenditure on infrastructure and human capital
-
-
-
Consequences
Benefits
Economic growth outstrips population growth > higher real income per head > higher consumption of goods and services > higher material standard of living
Avoid other macroeconomic problems such as inflation, unemployment, balance of payment problems
-
-
Costs :
Resources diverted away from producing consumer goods towards producing capital goods> high opportunity cost
Higher lvl of consumption > higher lvl of production > higher lvl of pollution
Shortage of non-renewable resources for future generations
-
-
Increase stress and anxiety lvl
a greedier, more selfish and less caring society
-