9) Economic Growth

Cards (5)

What is actual growth?
An increase in the real GDP
What is potential growth?
An increase in the productive capacity of the economy
What is a negative output gap?
When national income is less than the maximum national income given the productive capacity of the economy
What is a positive output gap?
When national income is (briefly) greater than the theoretical maximum potential capacity of the economy
What is the trade cycle?
Over time, the economy goes through booms and slumps