ECO summary：ECONOMIC GROWTH

Long term economic growth requires:



-increase productivity



-improvements in production technology







INCREASE AD:



-higher consumer expending



-increase government capital investment



-increase government spending in goods and services and reduce tax



-increase export



-reduce import expending







SUPPLY-SIDE:



-higher productivity



-increase input



increase labour supply



increase stock capital input



-technological advances



innovation and invention



reduce unit cost






higher AD and a rise in LRAS

short term changes in sras

RISING AD

ECO summary：balance of payment

what are included:
-trade in goods
-trade in services
-investment income from UK overseas assets
-transfer of money between people and government
trade goods -transfer of money =comprises the current account

actual GDP>potential GDP:positive output gap
actual GDP
AD:C+G+I+（X-M)

EXpenditure reduction:
-higher interest rate
-higher tax