ECON 2020U Chapter Notes - Chapter 22: Real Interest Rate, Potential Output, Economic Equilibrium
Document Summary
Growth is sustained expansion of production possibilities measured as the increase in real. Rapid economic growth maintained over a number of year can make a poor nation into a rich ones, such as places like hong kong and south korea. Economic growth rate is the annual percentage change in real gdp. Growth rate of real gdp tells us how rapidly the total economy is expanding. This measure is useful for telling us about potential changes in the balance of power among nations. Real gdp per person is real gdp divided by the population. Real gdp per person growth rate = Real gdp per personcurrent year realgdp per person previous year. Real gdp per person grows only if real gdp grows faster than the population grows. Sustained growth of real gdp per capita can transfer a poor society into a wealthy one.
