4.6

Economic growth

9 flashcards to master Economic growth

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Definition Flip

Define economic growth and explain how it is typically measured.

Answer Flip

Economic growth is an increase in the real GDP of an economy over time. It is typically measured as the percentage change in real GDP, which adjusts for inflation, over a specific period (

Example: quarterly or annually).
Key Concept Flip

Distinguish between nominal GDP and real GDP. Why is real GDP a better measure of economic growth?

Answer Flip

Nominal GDP measures the value of goods and services produced at current prices, while real GDP adjusts for inflation. Real GDP is a better measure because it reflects the actual increase in the quantity of goods and services produced, not just price changes.

Key Concept Flip

Explain two causes of economic growth.

Answer Flip

Economic growth can be caused by an increase in the quantity or quality of factors of production.

Example: increased investment in capital goods (like machinery) and technological advancements can increase productivity, leading to higher output and economic growth.
Key Concept Flip

How does economic growth potentially improve living standards?

Answer Flip

Economic growth can improve living standards by increasing average incomes, allowing consumers to purchase more goods and services. It can also lead to increased government revenue, which can be used to fund better healthcare, education, and infrastructure.

Key Concept Flip

Outline two potential negative consequences of rapid economic growth.

Answer Flip

Rapid economic growth can lead to increased pollution and environmental degradation due to increased production and consumption. It can also exacerbate income inequality if the benefits of growth are not distributed evenly across the population.

Definition Flip

What is meant by 'sustainable' economic growth?

Answer Flip

Sustainable economic growth is growth that meets the needs of the present without compromising the ability of future generations to meet their own needs. This involves balancing economic development with environmental protection and social equity.

Key Concept Flip

Explain how increased investment in education can lead to economic growth.

Answer Flip

Increased investment in education leads to a more skilled and productive workforce. A more skilled workforce can produce higher quality goods and services more efficiently, leading to increased output and economic growth.

Key Concept Flip

Discuss how technological advancements can contribute to economic growth.

Answer Flip

Technological advancements lead to innovation and increased efficiency in production processes. This allows firms to produce more goods and services with the same amount of resources, or the same amount of goods and services with fewer resources, leading to increased output and economic growth.

Example: robotics in car manufacturing.
Definition Flip

Define Gross Domestic Product (GDP).

Answer Flip

GDP is the total value of all final goods and services produced within a country's borders during a specific period, typically a year. It is a primary indicator used to gauge the size and health of a country's economy.

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4.5 Supply-side policy 4.7 Employment and unemployment

Key Questions: Economic growth

Define economic growth and explain how it is typically measured.

Economic growth is an increase in the real GDP of an economy over time. It is typically measured as the percentage change in real GDP, which adjusts for inflation, over a specific period (

Example: quarterly or annually).
What is meant by 'sustainable' economic growth?

Sustainable economic growth is growth that meets the needs of the present without compromising the ability of future generations to meet their own needs. This involves balancing economic development with environmental protection and social equity.

Define Gross Domestic Product (GDP).

GDP is the total value of all final goods and services produced within a country's borders during a specific period, typically a year. It is a primary indicator used to gauge the size and health of a country's economy.

About Economic growth (4.6)

These 9 flashcards cover everything you need to know about Economic growth for your Cambridge IGCSE Economics (0455) exam. Each card is designed based on the official syllabus requirements.

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