Question 5
[Maximum number: 20]
Economic growth can only occur when an economy is below full employment.
Evaluate this statement.
CAIE A-Level Economics 9.2.1 Actual and Potential Growth
Practise measuring actual growth from real GDP and showing movement towards capacity, while representing potential growth by an outward PPC or LRAS shift and evaluating their…
How this is tested
- measure actual growth as the percentage rise in real GDP and show fuller resource use on a PPC
- show potential growth as an outward PPC or LRAS shift from more or better productive resources
- evaluate whether growth uses spare capacity, expands capacity or combines both processes