GDP & Economic Growth Flashcards
1
Q
What is GDP
A
The sum of the value of all the goods and services produced in a country in a year
2
Q
How is economic growth calculated
A
by using GDP figures
3
Q
What are the two types of economic growth
A
actual and potential
4
Q
What is potential economic growth
A
the expansion in the productive capacity of the economy in a period of time
5
Q
What is actual economic growth
A
the rate of growth of GDP in a period of time
6
Q
Why might actual and potential economic growth differ
A
because potential economic growth assumes that the economy is operating at full capacity, which is rarely the case
