What students need to learn:
Content
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Students should be able to:
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Additional Guidance Notes
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Actual and potential growth
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Identify trends in growth rate; sustainable growth; understand output
gaps in developed economies.
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Changes in the level of GDP should be distinguished from changes in
the rate of growth of GDP, for example, the level of
GDP still rises when an economy grows at a slower rate, as long as
growth is positive.
Students will not be expected to know specific numerical information
for various countries.
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Causes and
constraints on
growth
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Explain the significance of factors such as investment or innovation;
constraints may be in terms of absence of capital markets or instability of government.
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Students should consider some of the following, for example:
Students should understand changes in injections and leakages affect
changes in the flow of income.
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Benefits of growth
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Understand the benefits of growth to citizens of increased standards
of living, to firms (increased profits) and to government (for example, increasing
tax revenues).
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Students may consider whether an increase in income necessarily
increases living standards.
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Costs of growth
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Understand the adverse consequences of growth for the environment;
Balance of
Payment problems; income distribution and the opportunity cost of
growth.
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Evaluation might consider whether the benefits or costs are greater,
the difficulties of measurement and the changes over time.
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