Economic growth
Increase in the amount of goods and services produced per head of the population over a period of time.
Causes of economic growth
Discovery of natural resources, investment in capital or infrastructure, technical progress, and relocation of resources.
National output
Total value of output of goods and services produced by a nation.
Benefits of economic growth
Increased employment, output, sales and profits, income, expenditure, low and stable inflation, and increased tax revenue.
GDP
Gross domestic product is the total market value of all final goods and services provided within an economy by its factors of production over a given period of time.
Drawbacks of economic growth
Unemployment, depletion of natural resources, inflation, widening income inequalities, and negative externalities.
Nominal GDP
Value of output produced measured at their current market value.
Real GDP
The total market value of all final goods and services produced within a country in a given period of time, adjusted for inflation.
CPI
Consumer Price Index is a fixed basket of goods used to measure inflation.
GDP per capita
Average output income per person in an economy, calculated as GDP divided by population.
Inflation rate
Percentage change in prices, calculated as (new-old)/old x 100.
Recession
Negative economic growth causing a fall in real GDP and real wages.
Financial crisis
A severe disruption in the financial system causing a fall in business/consumer confidence, cut in production, cut in government spending, and a fall in consumption.
Trade wars
Conflicts between countries involving tariffs and trade restrictions, leading to a fall in real GDP and a rise in interest rates.