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Economic growth for South Korea by Mind Map: Economic growth for South Korea
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Economic growth for South Korea

Evidence: Current account balance BOP fell nearly 2 times from positive value in 1998 to a negative value in 2008 during recession

Shows that South Korea heavily reliant on exports for its economic growth which may have adverse effects

According to the Korean Financial Service Commission (FSC), South Korean investors’ foreign exchange margin trading activity increased 594% from 2007 to 2008, reaching 454 trillion won in 2008 compared to 65 trillion in 2007. In 2009, an estimated 361 trillion won was traded in the first five months of 2009 alone, with retail investors accounting for 99% of all transactions.

BOP current account deficit

brought about by increase in imports but little revenue earned from exports of goods

Alleviates macro problems e.g. Inflation rate, Unemployment rate

Example: Fall in unemployment rate from 4.4 to 3.2%, from 2000 to 2007.


Structural Unemployment in less favoured industries

Income inequality due to difference in growth

Actual growth

Definition: Annual percentage increase in national output, i.e. the rate of growth in actual output.

Factors affecting Actual Growth


Increase in consumption rate due to higher income per capita

Lower poverty rate due to increase in income

Greater environmental awareness for South Korea

Potential growth

Definition: Speed at which the economy could grow,i.e the rate of growth in potential growth.

Factors affecting Potential Growth