economic growth

• What does macroeconomics focus on?

  The whole economy
• What are macroeconomic aggregates?

  Total measures of economic performance
• What is the definition of macroeconomics?

  Study of interrelationships between economic variables
• What are three government objectives in macroeconomics?

  • Economic growth
  • Full employment
  • Low and stable inflation
• Why is economic growth an objective for the government?

  It creates jobs and increases tax revenue
• What does full employment aim to achieve?

  As many people as possible have jobs
• Why is a low and stable rate of inflation important?

  It keeps prices stable and predictable
• What does balance of payments equilibrium mean?

  Value of exports equals value of imports
• Why is government borrowing a concern?

  It has to be paid back with interest
• What is the purpose of protecting the environment in macroeconomic objectives?

  To reduce pollution and conserve resources
• Why is greater income equality a government objective?

  To avoid a widening gap in household incomes
• What data do economists track to judge economic performance?

  Unemployment, inflation, economic growth
• What is GNI per capita?

  Gross National Income per person
• What does ONS stand for?

  Office for National Statistics
• Why is it important to interpret economic data carefully?

  Data collection methods may vary
• What is a limitation of GDP mentioned in the material?

  It can't predict future economic performance
• What does GDP stand for?

  Gross Domestic Product
• Why does GDP matter for the economy?

  It indicates economic growth and job creation
• What are nominal values in economic measurements?

  Values using current prices at transaction time
• What are real values in economic measurements?

  Values adjusted for changing prices over time
• What is the difference between short-run and long-run economic growth?

  Short-run is actual GDP increase; long-run is potential growth
• What does the Production Possibilities Frontier (PPF) illustrate?

  Trade-offs between two goods in an economy
• What causes short-run economic growth?

  Increased use of existing factors of production
• What are the four factors of production?

  Capital, enterprise, land, and labour
• What is productivity in economic terms?

  Efficiency of a factor of production
• What is total factor productivity?

  Average productivity of all production factors
• How does an increase in productivity affect economic growth?

  It raises aggregate supply and potential output
• What is net investment?

  Gross investment minus depreciation
• What does Gross Fixed Capital Formation measure?

  Net additions to the capital stock
• What trend was observed in UK investment spending?

  Overall increase with a dip due to COVID
• What are the main sources of long-run economic growth?

  • Increase in quantity of production factors
  • Improvement in quality via productivity increases
• What is needed to increase an economy's productive capacity?

  An increase in net investment
• How is net investment calculated?

  Net investment = Gross Investment - depreciation
• What does "Gross Fixed Capital Formation" measure?

  Net additions to the capital stock
• What does Gross Fixed Capital Formation include?

  Depreciation and net additions to capital
• What is the significance of data being expressed in millions?

  It standardizes the measurement of investment
• What trends can be observed in UK investment spending from the data?

  • Steady trend overall increase in investment
  • Lower dip due to COVID-19 concerns
• How can an increase in the labor force affect economic growth?

  It could increase productive capacity
• What factors determine if an increased workforce helps the economy grow?

  Efficiency of the workers
• What can improve the quality of labor?

  Education and training policies