Economic Growth Flashcards
dp percent change formula
gdpyr2-gdpyr1/gdpyr1 times 100
gdp perc cnahge formula
gdp yr2/gdp yr 1 -1 times 100
How is economic growth defined?
An increase in the productive capacity of the economy.
What is Real GDP?
GDP adjusted for inflation.
What is Nominal GDP?
GDP not adjusted for inflation.
Why is 3-4% considered a desirable growth rate?
t balances employment with low inflation risks.
What happens if economic growth is too slow?
Higher unemployment due to underutilized resources.
What happens if economic growth is too fast?
Wh Risk of inflation as demand outpaces supply capacity.
Why is Real GDP per capita important?
It measures living standards by reflecting average income.
What is Real GDP per capita?
GDP per person, showing average income per person.
Why might GDP grow but not GDP per capita?
Population growth can increase GDP but not necessarily per capita income.
