ECONOMIC GROWTH: Increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Read more: Economic Growth

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Ian De La Garza
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Ian De La Garza
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ECONOMIC GROWTH: Increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Read more: Economic Growth
  1. Gross Domestic Product (GDP): The dollar amount of all the final goods and services produced WITHIN a country’s national borders in a year.
    1. Real GDP and Nominal GDP
      1. Real GDP: is equal to the economic output adjusted for the effects of inflation.
        1. Nominal GDP: is economic output without the inflation adjustment.
        2. GDP per capita: Real GDP divided by population gives you GDP per capita
          1. Limitations: GDP does not describe composition of output. GDP does not reflect quality of life
          2. 3 forms to measure GDP
            1. Expenditure Method: Measures the value of all spending on goods and services in the economy
              1. Income Method: Measures the value of all incomes in the economy( Income is a way to measure what is produce).
                1. Output method: Measures the actual value of the goods and services produced.

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