The National Economy

The National Economy

What is Economic Growth? Economic growth is an increase in the productive capacity of an economy. It is measured by comparing the GDP (total value of goods and services produced in an economy) in one year to GDP in the next. In the short run that means increasing aggregate demand,…
Economists talk about short run and long run growth. Short run growth is just an increase in output (like above). Long run growth is an increase in capacity. Think about it like a school. In the short run a school can grow numbers by increasing the number of desks in…