ECON 1010 Lecture 7: Economic Growth
3 Feb 2019
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Situated backwards in connection to what we have done: in evaluating that fundamental macroeconomic question: - if left alone by market how quickly do markets adjust, steady growth, living standards, full employment. Gdp, which is what we looked at for measuring living standards, is the most important relevant variable that is going to connect to economic growth in this chapter. We know gdp has many flavours potential, nominal, real gdp etc. Economic growth mostly connects to real gdp and real gdp per person. General definition an expansion of an economy"s capacity to produce products and services. First of all, it will relate to potential gdp if potential gdp per person increases, then there is economic growth. The ppf shows combinations of products and services in an economy when all inputs are. There are three possibilities when economy is on that frontier. 1- all inputs are fully employed economy is producing at its potential gdp.
