Causes and factors of economic growth

• What is actual growth?

  The measure of an increase in real GDP
• What is potential growth?

  An indicator that shows how much the economy could produce if there was full employment or if all the resources in the economy were used efficiently
• What can potential growth be determined by?

  The potential size of the labour force, the stock of capital, discovery of new natural resources, and productivity
• When does economic growth occur in macroeconomics?

  When there is an increase in AD or in LRAS
• What are factors which cause a change in AD?

  An increase in consumption, investment, government expenditure, and exports
• What are factors which cause a change in LRAS?

  An increase in investment, new technology, an increase in migration, and supply side policies