ECN 204 Chapter 6: chapter 6 macro

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Economic growth is shown and measured as an increase in real gdp over an interval of time, or it can be shown and measured as an increase in real gdp per capita during a certain period of time. Regardless of how it is shown and measured, economic growth is determined as a percentage rate of growth every three months. The percent change in growth is calculated by the formula : new real gdp old real gdp/old real gdp * 100. The second definition takes into account the number of people that are within a country. To compare the living standards between countries, the real gdp per capita is a better approach of doing so. Growth is an important economic goal to accomplish as growth reduces the impact scarcity has on society where if we increase the output per person this will increase their income thus lead to a better standard of living.