Economic growth, the financial system, and business cycles. The previous two chapters presented information about the measurements of important macroeconomic variables: gdp, unemployment, and inflation. Now, we move on to more macroeconomic concepts. While we"ve talked about real gdp per capita, now we will look at the concept of standard of living and long run economic growth. We"ve talked about movements in real gdp and unemployment, but now we will look at the concept of business cycles. This figure shows real gdp per capita in the us over time. While there have been short term up and down fluctuations, over time, it has generally been rising, implying the average standard of living has been increasing over time. This may actually understate the true increases in the standard of living because of new goods and services that have been introduced over time.