Think of an economy like a garden. When the garden gets more sunshine, water and good soil, the plants grow taller and produce more fruit. Similarly, an economy grows when it produces more goods and services over time. The main measure is GDP – the total value of everything produced.
📊 Analogy: If GDP is the height of a plant, growth rate is how fast it climbs each year.
Sustainability is like keeping a battery charged. If you use the battery too fast, it will die. If you recharge it wisely, it lasts longer. In economics, sustainability means using resources so that future generations can also enjoy them.
🌱 Analogy: A forest that keeps producing new trees while old ones are cut down.
Resources are the raw materials and energy we use. They can be renewable (like wind, solar, fish) or non‑renewable (like coal, oil, minerals). To grow sustainably:
GDP growth can be expressed as:
\$\frac{dGDP}{dt} = C + I + G + (X - M)\$
where:
Example: If a country spends \$500bn on consumption, \$200bn on investment, \$150bn on government, and has net exports of \$50bn, the annual GDP growth is:
\$\frac{dGDP}{dt} = 500 + 200 + 150 + 50 = 900 \text{ bn dollars}\$
Solar panels convert sunlight into electricity. They are renewable and produce no pollution during use.
| Year | Cost ($/kWh) | CO₂ Saved (t) |
|---|---|---|
| 2020 | 0.12 | 1,200,000 |
| 2030 | 0.08 | 2,400,000 |
📈 As costs fall, more households can switch to solar, boosting growth while cutting emissions.
Remember: examiners look for understanding, not just memorised facts.