Causes of Econ growth (Short + Long Run)

• Economic growth is an increase in real GDP in an economy in a year caused by an increase in aggregate demand or an increase in el Ras.
• Short-run growth, also known as actual growth, occurs when there is an increase in aggregate demand and the economy is using up spare capacity to increase the output of goods and services in the economy to increase real GDP.
• The two different causes of short-run growth are an increase in aggregate demand and an increase in el Ras.
• An increase in aggregate demand is known as short-run growth or actual growth.
• When there is an increase in aggregate demand, the economy is using up spare capacity to increase the output of goods and services in the economy to increase real GDP.
• The economy is producing more goods and services using up spare capacity to do so.
• The Keynesian version of a shift of aggregate demand to the right shows that the economy is using up spare capacity.
• A basic shift of aggregate demand to the right shows that the economy is using up spare capacity.
• A negative output gap indicates that the economy is using up spare capacity.
• A movement from inside the PPF towards the PPF indicates that the economy is using up spare capacity to produce more of both goods and services.
• Short-run economic growth is a booster shift of aggregate demand to the right.
• If competition increases in the economy, it means firms in the economy have to reduce their long-run cost of production in order to be competitive, and this can cause the Production Possibilities Frontier (PPF) curve to shift to the right.
• New resource discoveries, which are considered as an increase in the quantity of land, can cause the Production Possibilities Frontier (PPF) curve to shift to the right.
• The three reasons why the Production Possibilities Frontier (PPF) curve can shift to the right are an increase in the quantity of factors of production, an increase in the quality of factors of production, and an increase in the productive efficiency of the economy.
• Increases in labor productivity, an increase in the workforce size, and investment can cause the Production Possibilities Frontier (PPF) curve to shift to the right.
• Infrastructure improvements, such as transport infrastructure and physical capital infrastructure like schools and hospitals, can be considered as an increase in the quantity of capital and can cause the Production Possibilities Frontier (PPF) curve to shift to the right.
• Long-term growth or potential growth can be illustrated by a shift of the Production Possibilities Frontier (PPF) curve to the right, indicating an increase in the long-run growth rate.
• The classical interpretation of the Production Possibilities Frontier (PPF) curve does not matter, as both shift to the right can be used to show potential growth.
• The actual curve is the long-run aggregate supply curve.
• Short-run growth or actual growth can occur when there is an increase in aggregate demand or an increase in el Ras.
• Long-run growth, also known as potential growth, occurs when there is an increase in El Ras and when that happens it means there is an increase in the productive capacity of the economy.
• The economy has the potential to grow at a faster rate when there is an increase in El Ras.
• Long-run growth occurs when El Ras.