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Summaries · Grade 7 EMS › GDP, production and resources
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GDP, production and resources

What GDP measures, economic growth, productivity, and the reward for each factor of production. Read one part at a time and tap “I know this”. Then test yourself in the quiz.

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GDP and growth

GDP measures the value of all the final goods and services a country produces in a year. An economist studies the economy. When GDP rises there is economic growth: more work and income.

Inputs(resources)Process(change)Outputs(goods,services)
Inputs become outputs in the process.
The factors of production: land, labour, capital and the entrepreneur.
The factors of production: land, labour, capital and the entrepreneur.
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Who gets what?

Factor of productionReward
Natural resourcesRent
LabourWages or a salary
CapitalInterest
EntrepreneurshipProfit
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Resources and sectors

  • A renewable resource renews itself, like wind.
  • Recycling turns waste into new products: it lowers costs and creates jobs.
  • A gold mine is primary, a bread factory secondary, a plumber tertiary.
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Remember this and test yourself

Remember this: your summary
  • GDP (gross domestic product) is the value of everything a country produces; only finished products count, to avoid double counting.
  • GDP rises: the economy grows. GDP falls: the economy shrinks and jobs are lost.
  • Productivity: producing more with the same resources.
  • Rewards: natural resources → rent; labour → wages; capital → interest; entrepreneurship → profit.
  • The three sectors work together: each supplies the next.

Write these points in your book. Read them again the night before the test.

Memory trick

Every factor gets paid: land gets rent, hands get wages, money gets interest, the boss gets profit.

Flash cards · Tap to turn over

Important words

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Test yourself · Part 2

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