ECO102H1 Lecture Notes - Real Interest Rate, Investment Goods, Potential Output
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ECO102H1 Full Course Notes
Verified Note
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Document Summary
The aspect of economic growth is annual growth rate, the index of real per capital gdp and measure of productivity which is the index of real gdp per employed worker. Economic growth: sustained long-run increases in the level of real gdp. Economic growth is a powerful means of improving average material living standards. A family often fines that an increase in its income can lead to changes in the pattern of its consumption extra money buys important amenities of life and also allows more saving for the future. Similarly, growth that raises average income tends to change the whole society"s consumption pattern, shifting away from tangible goods and toward services. Another example of how economic growth can improve living standards involves environmental protection. Economic growth provides higher incomes that often lead to a demand for a cleaner environment, therefore leading higher average living standards that are not directly captured by measures of per capital gdp.
