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Economic growth

Economic growth occurs if the purchasing power of national income increases, and New Zealanders should be able to satisfy more of their needs and wants. In New Zealand, the economic growth rate is determined by changes in real GDP, statistics for which are published quarterly by Statistics New Zealand.

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Key concept indicators

  • Identifies and uses (in context) concepts related to economic growth, such as:
    • the different ways of measuring economic growth including: real GDP productive capacity, measures, net social welfare
    • nominal and real indicators (for example, real and nominal GDP)
    • physical and human capital
    • potential GDP and the business cycle.
  • Understands that net social welfare index measures of economic growth (for example, the Human Development Index) use a combination of economic indicators (for example, real GDP) and quality of life indicators (for example, life expectancy), and that such measures are used to overcome limitations associated with other measures of economic growth.
  • Integrates changes shown on the production possibility frontier model into detailed explanations of causes of economic growth.
  • Integrates changes shown on the aggregate demand and aggregate supply model into detailed explanations of the causes of fluctuations in the business cycle (mainly due to changes in aggregate demand components) and supply-side causes of changes in potential growth (due to changes in factors affecting aggregate supply).
  • Integrate changes shown on the circular flow model (for example, changes in withdrawals and injections) into detailed explanations of causes of economic growth.
  • Compares and contrasts the impact of the different causes of changes in economic growth, for example, the differing impacts of a decrease in interest rates and a decrease in nominal wages.
  • Compares and contrasts the impacts of changes in economic growth on various groups in New Zealand society and /or the environment, for example:
    • the uneven impact of growth on the economy, such as uneven distribution of income and uneven regional growth rates
    • positive and negative outcomes of growth, such as, increased purchasing power for consumers weighed against the environmental damage caused when producers use unsustainable production methods.

Last updated May 9, 2013