Economic Growth Flashcards
What is actual growth?
Economic growth as measured by recorded changes in real GDP over time
What is a boom/peak?
A period of time on the economic cycle that shows when the economy is operating above its productive potential
What is a demand side shock?
A sudden and large impact on aggregate demand
What is a depression/slump?
A period of the trade cycle when there is a particularly deep and long fall in output
What is a downturn?
A period of the trade cycle when either economic growth or GDP itself are falling
What is economic recovery?
The movement back from where theeconomy is operating below its productive potential to a point where it is at its productive potential
What is export led growth?
A rose in aggregate demand caused by a rise in exports
What is hysteresis?
The process whereby a variable does not return to its former value when changed
What is an output gap?
The difference between the actual level of GDP and the productive potential of the economy
When is there a positive output gap?
When actual GDP is above the productive potential of the economy and it is in boom
