1- Economic Growth Definitions Flashcards
Actual Growth
Economic growth measured by changes in GDP.
Boom
The peak of the business cycle, when growth is high.
Economic growth
An increase in the long-term productive potential of the economy.
An increase in the amount of goods and services which are produced, measured by an increase in real GDP.
GDP
The value of goods and services produced in a country over a given period of time.
GDP Per Capita
Total GDP divided by the population.
Gross National Income (GNI)
The value of goods and services by a country over a period of time plus net overseas interest payments and dividends.
Living standards
The quality of life enjoyed by people in a country.
Long run trend of growth
The average sustainable rate of economic growth over a period of time.
Negative output gap
When GDP is lower than predicted; the economy is producing below full output.
Nominal GDP
GDP which does not take inflation into account; GDP at current prices.
Output gap
The difference between the long term trend rate of growth and actual growth.
Positive output gap
When GDP is higher than predicted; the economy is producing above full output.
Potential growth
A change in the productive potential of the economy.
Real GDP
GDP which is adjusted for the effects of inflation.
Recession
The trough of the business cycle, when growth is low.
The government defines it as where real GDP falls in at least 2 successive quarters.
