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Economics IGCSEPDF 93
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Effective Definitions
GrossDomesticProduct(GDP): The total
value of all final goods and services
produced within a country's borders in a
given time period.
Real GDP: GDP adjusted for inflation
(measured at constant prices). This is the
key measure of economic growth.
Nominal GDP: GDP measured at current
prices (not adjusted for inflation).
Recession: A period of at least two
consecutive quarters (six months) of
negative economic growth (falling real
GDP).
Notes: Causes and Consequences
of Economic Growth
Causes of Growth
Increase in Aggregate Demand
(Short-run growth):
Consequences of Growth
● Benefits:
Higher Living Standards:
Consumers havehigher
incomes and access to more
goods and services.
●
●
○
○ Lower Unemployment:
Firms demand more labour
to increase output.
Higher Tax Revenue:
Government revenue rises,
○
Lowerinterest
rates,lower taxes,higher consumer
confidence, or increased
government spending.
Increase in Aggregate Supply
(Long-run growth): Improvements
in technology, increased
quantity/quality of capital
(investment), increased
quantity/quality of labour
(migration/training), or discovery of
new natural resources.