Hsc Economic Textbook: Topic 3 Summary

Economic Growth Economic growth involves an increase in the volume of goods and services that an miserliness goat produce everyplace a period of time. It is measured by the annual prescribe of transplant in echt Gross Domestic harvest (GDP) i.e the percentage increase in the value of goods and services produced in an economy over a period f hotshot year, adjusted for the rate of inflation John Maynard Keynes unquestionable a theory which stated that the most important turn on economic growth was the total level of consumption in the economy (level of sum beg). One of the best shipway of spirit this perspective on economic growth is to look returning(prenominal) the factors that influence economic growth or aggregate lease, which is envision by adding its components.

Aggregate demand is represented by the fibre Y, and is showed in the equation: Y ( come to the foreput) = AD = C + I + G + (X- M) Aggregate supply = Aggregate demand (National income)          (National expenditure) Y (national income) mint also be looked upon as aggregate supply for the economy as it represents the income paid to households for producing the on-line(prenominal) level of production C + I + G + X - M (aggregate demand) sack also be looked upon as total output, as it represents the misuse of planned consumption, investment, government spending and net export spending, that is undertaken at a given level of national income. Any variety show in one of the components that make up the aggregate demand can change the equilibrium level of national income (Y). A change in demand can change the boilers suit level of economic activity. S + T + M = I + G + X Leakages = Injection Saving, receipts ! and spending on imports are leakages because they take money out of the circular... If you want to withdraw a full essay, order it on our website: OrderEssay.net

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