What is meant by economic growth?
Economic growth is an increase of the in the real level of output. It refers to an increase in a countries annual output of goods and services. The most common measure of this is G.D.P. Economic growth figures must be corrected for inflation. Nominal G.D.P. is not adjusted for inflation whereas real G.D.P. is.
Economic growth is also a long-term expansion of the productive potential of the economy. Sustained economic growth should lead to an increase in real living standards and rising employment.
Explain the differences between an economic recession and an economic boom.
An economic recession and an economic boom are best described using the diagram of the economic cycle as shown below.
There are four important stages. The slowdown towards the recession and the recovery towards a boom.
They are both opposites to each other. A recession is a period when a country’s economy is less successful and more people become......
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