b) distinction between actual and potential growth

Cards (5)

  • what's Actual economic growth ?
    an increase in quantity of goods/services produced in an economy in a given period of time
  • how's actual growth measured?
    by percentage change in real gross domestic product (GDP)
  • what's Potential growth?
    increase in productive potential of an economy 
  • how's potential growth shown?
    shift outward of the PPF or LRAS curve
  • actual economic growth may be less than the potential growth available to the economy