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Indicative Content Definition of Economic Growth (Increases in GDP)

This document defines economic growth as increases in GDP and discusses the differences between GDP and GNP. It explains that GDP measures total output within a country's borders while GNP measures output by a country's enterprises whether located domestically or abroad. The document also outlines the key components of calculating GDP and discusses both the pros and cons of economic growth. The pros listed include higher incomes and consumption as well as improvements to health and living standards. The cons discussed are social costs like pollution, depletion of resources, changes to lifestyles, and unequal distribution of wealth.

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Kazi Mohasin
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23 views

Indicative Content Definition of Economic Growth (Increases in GDP)

This document defines economic growth as increases in GDP and discusses the differences between GDP and GNP. It explains that GDP measures total output within a country's borders while GNP measures output by a country's enterprises whether located domestically or abroad. The document also outlines the key components of calculating GDP and discusses both the pros and cons of economic growth. The pros listed include higher incomes and consumption as well as improvements to health and living standards. The cons discussed are social costs like pollution, depletion of resources, changes to lifestyles, and unequal distribution of wealth.

Uploaded by

Kazi Mohasin
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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GEE Lecture 2 - Tutorial Q (ANSWER GUIDE)

Indicative content
Definition of economic growth (increases in GDP)
Difference between GDP and GNP - Gross Domestic Product (GDP) shows the value
of the output produced within a country in a given time period. Gross National
Product (GNP) is the market value of all products and produced in one year by labour
and property supplied by the residents of a country. While GNP measures the output
generated by a countrys enterprises (whether located domestically or abroad), GDP
measures the total output produced within a countrys borders (whether produced by
that countrys own local firms or by foreign firms).
Calculation of GDP = C+I+G+X-M Discussion of each component of GDP and how
they affect economic growth
Pro economic growth
o People prefer more goods and services rather than fewer. Provided economic
growth outstrips population growth, it will lead to higher income per head and
higher consumption.
o Using the UK as an example, the poorest families of today are better off than
those of the 19th century as a result of economic growth
o Absolute poverty has been largely eliminated in the UK partly due to the
welfare provisions which have been funded by the proceeds of economic
growth
o Health and living standards continue to improve
o Life expectancy continues to increase as a result of better healthcare facilities
Problems as a result of economic growth
o Social costs of economic growth e.g. congestion, pollution - these may
diminish the quality of life
o Consumption of irreplaceable resources - and dangers associated with
substitutes e.g. nuclear power
o Change in lifestyles and attitudes - complacent, carefree and selfish attitudes
towards life, reliance on the safety net of state benefits and welfare provision.
o Growth may not be fairly distributed - wealth concentrated in the hands of a
small percentage of the population
Mark allocation:
Max 5 marks: Student describes key issues and theories relating to economic growth and its
associated pros and cons.
Max 10 marks: Student applies and/or explains key issues and theories relating to economic growth
and its associated pros and cons.
Max 15marks: Student analyses the key issues and theories relating to economic growth and its
associated pros and cons.
Max 25 marks: Student evaluates the key issues and theories relating to economic growth and its
associated pros and cons.

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