Economic Growth
Economics notes
Economic Growth
➡️ Shifts in the AD curve will cause changes in the level of real output, the price level and employment. An increase in AD will lead to an increase in real output, a rise in the price level and an increase in employment. Conversely, a decrease in AD will lead to a decrease in real output, a fall in the price level and a decrease in employment.
➡️ Shifts in the AS curve will cause changes in the level of real output and the price level, but not necessarily in employment. An increase in AS will lead to an increase in real output and a rise in the price level, while a decrease in AS will lead to a decrease in real output and a fall in the price level.
➡️ The effects of shifts in the AD and AS curves on the level of real output, the price level and employment are interrelated. For example, an increase in AD will lead to an increase in real output, which in turn will lead to an increase in employment. Similarly, a decrease in AS will lead to a decrease in real output, which in turn will lead to a decrease in employment.
What is economic growth and how is it measured?
Economic growth refers to the increase in the production of goods and services in an economy over a period of time. It is measured by the percentage change in the Gross Domestic Product (GDP) of a country. GDP is the total value of all goods and services produced within a country's borders in a given period of time.
What are the factors that contribute to economic growth?
There are several factors that contribute to economic growth, including investment in physical and human capital, technological advancements, improvements in infrastructure, favorable government policies, and access to natural resources. These factors help to increase productivity, create jobs, and stimulate demand for goods and services, which in turn leads to economic growth.
What are the benefits of economic growth?
Economic growth has several benefits, including increased employment opportunities, higher incomes, improved standards of living, and reduced poverty. It also leads to increased tax revenues for governments, which can be used to fund public services such as healthcare, education, and infrastructure. Additionally, economic growth can stimulate innovation and entrepreneurship, which can lead to further economic development and growth.