Costs And Benefits Of Growth

• What are the associated causes and effects of economic growth?

  Benefits for consumers, businesses, and government
• What does 'living standards' refer to?

  Comfort and material goods someone can purchase
• What factors influence living standards?

  Employment, poverty, housing, healthcare, education
• What is a subsistence trap?

  Producing only necessities to survive
• What happens when the subsistence trap is broken?

  Workers seek employment and trade surplus
• What are the economic and social benefits of economic growth?

  • Higher living standards
  • Increased employment
  • Fiscal benefits to government
  • Improved health and education
  • Accelerator effect
  • Increased productivity
• How does economic growth affect living standards?

  Enables consumers to purchase more goods
• What is defined as extreme poverty?

  Living on less than $1.90 per day
• How does economic growth stimulate employment?

  Increased aggregate demand raises labor demand
• What fiscal benefits does economic growth provide to the government?

  Boosts tax revenue and reduces welfare payments
• How does economic growth affect health and education?

  Improves government spending on health and education
• What is the accelerator effect?

  Rising growth leads to new investments by firms
• How does productivity relate to economic growth?

  Higher output per worker leads to higher wages
• What creates a 'virtuous circle' in economic growth?

  Increased GDP leads to more jobs and spending
• What can savings fund in an economy?

  Future spending and investment opportunities
• What are the economic and social costs of economic growth?

  • Inflation
  • Environmental degradation
  • Increased inequality
• What happens if aggregate demand exceeds long-term growth rates?

  The economy may experience higher inflation
• What are negative externalities of economic growth?

  Pollution, congestion, and waste production
• What does unsustainable growth mean?

  Meeting present needs while compromising future needs
• How can economic growth lead to increased inequality?

  Benefits of growth may not be evenly distributed
• What does GDP per capita indicate?

  Total GDP divided by the population size
• How does inequality affect happiness in economies?

  Higher inequality often correlates with lower happiness
• What could an exam question ask regarding economic growth?

  To critique the costs or benefits of growth
• What evaluation points should be considered when assessing economic growth?

  • Effectiveness of data in measuring wellbeing
  • Methods of achieving growth (renewable vs non-renewable)
  • Winners and losers in society
  • Short-term vs long-term growth consequences
  • Magnitude of benefits vs costs
  • Possibility of sustainable and balanced growth
• What is a potential conclusion regarding economic growth?

  Sustainable growth may be slower but beneficial