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Economics Notes
Features of Economic Growth - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
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Text version
- Definition
- An increase in the ability of a country to produce goods and services
- Increased economic output possible if more resources are used in economy, or if existing resources used more efficiently
- Measured in Gross Domestic Product (GDP)
- Formerly measured in Gross National Product (GNP)
- Growth is a positive change in GDP (% increase in GDP)
- Rapid growth in GDP seen in China/India (Approx. 10% per year)
- Negative change in GDP (% decrease in GDP) indicates shrinking economy
- Shrinking GDP seen in Argentina in late 1990s
- Barriers to Growth
- Growth depends on quality and use of Factors of Production (Land, Labour, Capital, Enterprise)
- If Factors of Production lacking in quality, economic growth will be hindered
- Insufficient or contaminated land
- Insufficient or substandard labour supply
- Poor technical infrastructure e.g power, communication networks
- Poor social infrastructure e.g. schools, hospitals, housing
- Poor industrial infrastructure e.g. factories and machinery
- Access to export markets
- Economic policies of developed countries
- Controversies
- Is GDP growth always good?
- Failure of GDP to account for environmental effects of growth
- Routes to economic growth
- Prescriptions for growth and development through supra-national bodies such as IMF, World Bank and WTO
- Linkage of political aims to economic policies e.g. USA and Cuba, the West and countries of the Middle East
- Opposition between state intervention and market freedom
- Costs of Economic Growth
- Environmental effects such as pollution, congestion, carbon emissions
- Loss of ancient cultures, traditional ways of life
- Loss of natural resources such as forests through 'slash and burn' land clearance for urban growth and industrialisation
- 'One size fits all' view of economic growth prevents subtle differences in available routes to higher incomes
- Philosophical opposition to economic growth and materialism
- Search for fast economic growth may prevent focus on social goals e.g. care for elderly, the young
- Homogenised global culture
- Less Developed Economies
- In early stages of industrialisation
- Agriculture often has greater share of economy
- Low income levels mean lack of consumer demand, so focus on export markets
- Low levels of private investment due to low savings levels
- Inadequate factors of production pose barriers to growth
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