The Impact of Economic Growth (Edexcel A Level Economics A)

Increased incomes lead to better standards of living

Rising aggregate demand causes demand pull inflation; purchasing power of consumers on fixed incomes may fall

Decreased levels of absolute poverty

Lack of equity in the distribution of income - the rich may get richer and the poor poorer

Improvement in the quality/quantity of environmentally friendly technologies

Environmental damage caused by negative externalities of production 

Higher sales revenue for firms and greater profits

Increased inflation can harm export sales 

Increased investment by firms increases the potential output of the economy

Decreased export sales may lead to a delay in investment by firms

Reduced expenditure by governments on benefits

Increased income usually leads to greater consumption of demerit goods

Higher government tax revenue due to rising incomes and surging corporate profits

Greater output often requires more time from workers and can decrease leisure time and well-being

Increased employment resolves some of the negative social impacts of unemployment