SECTION 1MANAGING THE

ECONOMY

Managing the economy

GCSE ECONOMICS: UNIT 12

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SECTION 1MANAGING THE

ECONOMY

Managing the economy

GCSE ECONOMICS: UNIT 12

1.1 Economic Growth

SECTION 1MANAGING THE

ECONOMYWhat is Economic Growth?

• Put simply, “Economic growth is an increase in the value of goods and services produced by an economy over time”

• Why does economic growth matter….what are the benefits of economic growth?

• Complete your ideas on the sheet provided, using the internet to independently research ideas

SECTION 1MANAGING THE

ECONOMYWhy economic growth matters

• Economic growth means that production is increasing within an economy

• This is important because our standards of living depend on our access to goods and services

• Without growth people can only enjoy improvements in their standards of living at the expense of others in society

• With economic growth we can all potentially be better off!

SECTION 1MANAGING THE

ECONOMY

The benefits of economic growth

Increased profit

A rise in average living standards

The creation of new jobs

Lower unemployment

Improved business confidence

Increased tax revenues for the government

Technological innovation

Increased capital investment

SECTION 1MANAGING THE

ECONOMYAims of today’s lesson …

• Identify the key benefits of economic growth

• Investigate how we measure economic growth

• Analyse the different components of Gross Domestic Product

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ECONOMY

How do we measure Economic Growth?

SECTION 1MANAGING THE

ECONOMYWhat is included in GDP?

GDP = C + I +G (X-M)

C = ConsumptionI = InvestmentG = Government spendingX-M = Net Exports

SECTION 1MANAGING THE

ECONOMYConsumption (C)

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ECONOMY

Consumption spending is closely related to disposable

incomes

SECTION 1MANAGING THE

ECONOMYInvestment (I)

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ECONOMY

Government Spending (G)

SECTION 1MANAGING THE

ECONOMYExports (X)

This covers spending on UK products/services by

foreign nationals

SECTION 1MANAGING THE

ECONOMYImports (M)

This covers spending on foreign products/services

by UK citizens

SECTION 1MANAGING THE

ECONOMY

GDP: Lets look at the figures...

The Components of GDP

SECTION 1MANAGING THE

ECONOMYPlenary: Interactive Questions

• You will be asked 5 key questions from Today’s lesson

• Read each question carefully

• Choose the correct answer and then click on ‘Submit’

• Be prepared to discuss your answers

SECTION 1MANAGING THE

ECONOMYExtension Task…

• What effect has the eurozone crisis had on UK Economics Growth?

• Open the ‘Extension Task’ from the student shared area

SECTION 1MANAGING THE

ECONOMYAims of today’s lesson …

• Identify the key benefits of economic growth

• Investigate how we measure economic growth

• Analyse the different components of Gross Domestic Product

SECTION 1MANAGING THE

ECONOMYAmazing end game…

GDPEconomic

Growth

Gross Domestic

ProductConsumption

Higher living

standards

Increased employment

Investment Government

Spending

Imports

Exports

SECTION 1MANAGING THE

ECONOMY

Taking ownership of your learning….

• In small groups you will prepare a short 20 minute lesson on one of the following topics;

• The costs and benefits of UK economic growth• Unemployment within the UK (youth, adult, long term)• The causes and consequences of inflation• Exchange rates and their impact on UK Balance of Payments

• I want you to teach your chosen topic to the rest of the class in the MOST CREATIVE way you can think of.’

• The focus should be on the UK