Topic 4 : Macroeconomics Objectives

Economic Growth
-sustained increase in total output of goods and services
-occurs when there is increased total value of goods and services produced compared to previous years
-rate of increase of real GDP
-PPF shift outwards when it occurs

GDP-
Consumption, Investment, Government Spending, Net Exports

Benefits of economic growth:
–Higher income per capita and improved standard of living
–Creation of employment
–Less absolute poverty
–Higher levels of investment
–New technology
–External balance
–Greater tax revenue
–Higher environmental standards
–Leisure time

Costs of Economic Growth:
-Environmental degradation
-Structural unemployment
-Effects of inflation
-External balance and foreign debt
-Inequality of income worsens
-Materialism and consumerism
-Social costs