Ch32: Economic Growth

• Economic growth is the term used to describe the change in the total value of goods and services in a country from one year to the next.

  • Measured in GNP instead of GDP, as GDP encompasses Irish business and foreign business that send their profits back home. GNP encompasses only Irish businesses (includes Irish businesses abroad - they send their profits back home).
• Formula for Economic Growth:

  (Change in value between year one and year two) divided by (value of production in year one) multiplied by 100
• Impacts of Economic Growth on Society:

  + Increased employment

  + Government revenue increases from high employment and less people on Jobseekers Benefit

  + Increase in entrepreneurial activity

  - As economic growth leads to a longer lifespan, an ageing population strains the economy and health + social department

  - Improvements in technology mean that some jobs do not exist anymore. The people with defunct jobs are now unable to secure a job.
• Impacts of Economic Growth on the Environment:

  + As profit for businesses increase, they can develop or use less polluting methods of energy, to decrease their CO2 output.

  + The government has a higher revenue and can spend this revenue on promoting sustainability and taking measures to meet their climate change standards.

  - More and more natural resources (oil, gas, land) are being used and depleted as there are no alternatives just as good.

  - Economic growth leads to an increased production, meaning that the output of greenhouse gases increase, further destroying the environment.