Economic growth

• Long term economic growth refers to the sustained increase in a country's productive capacity or an increasing productive efficiency of the quality and quantity of the factors of production
• Economic development refers to the increase in the general living standards of the population.
• Short term economic growth is the increase in real value of goods, measured by the annual percentage of GDP.
• Long term economic growth refers to the long run increase in a country's productive capacity.
• Short term economic growth is driven by AD and SRAS with the monetary and fiscal policy.
• Long term economic growth is driven by the quality and quantity of the factors of production.
• Benefits of economic growth is that it creates the 'feel good factor', investments increase and there are better standards of living.
• Costs of economic growth is:

  • It makes it harder to find new gains
  • Inflation increases
  • It may cause a current account deficit
  • Technology may replace jobs.
• Policies to prevent economic growth is progressive tax, monetary policy, fiscal policy and supply side policy.