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National Budget
The National Budget, Growth and Economical Equalities
| Term | Definition |
|---|---|
| Economic growth | An increase in the real output of the economy |
| Recession | Negative economic growth for two consecutive quarters |
| hort-run economic growth | An increase in output that results from making use of spare capacity and unemployed labour |
| Long-term economic growth | The average rate of economic growth sustained over a period of time |
| Real GDP per capita | The total output of the economy in a year, divided by the size of the population, adjusted for inflation |
| PPF | A diagram of a simplified economy showing the maximum combination of products that can be produced given maximum productive efficiency |
| Actual growth | An increase in the productive potential of the economy, matched by an increase in demand |
| Potential growth | An increase in the productive potential of the economy, not necessarily matched by an increase in demand |
| Output gap | The difference between the actual level of GDP and the productive potential of the economy |
| Trend rate of economic growth | The long-run average increase in GDP |
| Economic cycle | The cyclical pattern of fluctuations in GDP from year to year |
| Productivity | Output per unit of input |
| Four benefits of economic growth | Increase standard of living Increased life expectancy Better healthcare and education Route out of absolute poverty |
| Four costs of economic growth | Finite resources used up Environmental pollution Urbanisation Increased inequality |
| Four problems of using national income statistics | Non-monetised economy The hidden economy The quality of goods and services Negative externalities |
| Sustainable economic growth | Growth that does not impose costs on future generations |
| HDI | An average between 0-1 of GNP per capita, life expectancy and educational attainment |
| ISEW | Adjusts GDP figures on attempt to capture the cost of externalities |
| GPI | Distinguishes between positive worth-while growth and negative uneconomic growth |
| Monetarism | A branch of neo-classical economics that believes Inflation should be controlled by the money supply |
| Factors affecting LRAS | Technological progress Attitudes and enterprise Macroeconomic policies Productivity Capital investment |
Created by:
rudolph.beukes
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