Economic growth

• economic growth


  the expansion of the productive potential of the economy
• GDP (gross domestic product)


  Measures/represents total output of an economy during a period of time (focuses on domestic economy)
• Potential economic growth

  an expansion in the productive capacity of the economy
• Nominal value

  the value of an economic variable based on current prices, taking no account of changing prices through time
• Index number

   a device for comparing the value of a variable in one period or location with a base observation (e.g. the consumer price index measures the average level of prices relative to a base period)
• Real value

  the value of an economic variable, taking account of changing prices through time
• Standards of living


  the quantity and quality of material goods and services available to a given population.
• National Income


  the total value of goods and services produced in an economy in a given period of time.
• Gross National Income (GNI)

  GDP plus net income from abroad
• Gross National Income per capita

  the average level of GNI per head of population
• Business Cycle

  a phenomenon whereby

  GDP fluctuates around its underlying trend, following a regular pattern
• Recession


  Occurs when GDP falls for two or more consecutive quarters
• Informal economy


  a sector of any economy that is neither taxed nor monitored by any form of government
• Subjective happiness


  The self-reported measure of how individuals perceive their overall happiness and satisfaction with life, often influenced by personal and economic factors.
• Black market


  an economic activity that takes place outside government-sanctioned channels. Illegal market transactions usually occur “under the table” to let participants avoid government price controls or taxes.
• PPP (Purchasing Power Parities) 


  an economic theory of exchange rate determination. It states that the price levels between two countries should be equal. This means that goods in each country will cost the same once the currencies have been exchanged.