AP Micro & MacroEconomic Growth
Economic Growth
Economic growth is a sustained increase in an economy's real output, usually measured as the rise in real GDP or real GDP per capita.
It is shown by an outward shift of the production possibilities curve or a rightward shift of long-run aggregate supply. Sources include more capital, labor, and natural resources, plus better technology and productivity. Per-capita growth is the main driver of rising living standards.
Formula / Example
Growth rate = (Real GDP₂ − Real GDP₁) ÷ Real GDP₁ × 100.
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Economic Growth →
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