How Does Economic Growth Happen?
Economic growth is a rise in real output over time: more goods and services, with rising prices taken out.
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In this lesson you learn to
- Define economic growth and real GDP
- Name the three ingredients of growth
- Tell growth from more work apart from growth from productivity
- Estimate doubling times for small growth rates
- Recognise the limits of GDP and the Solow finding
Check yourself: sample questions
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1.What is economic growth?
Economic growth is a rise in real output over time: more goods and services, with rising prices taken out.
2.What does "real" mean in real GDP?
Real GDP is measured at constant prices, so inflation is taken out.
3.Which are main ways to make more, as listed in the lesson? Select all that apply.
Several answers can be correct.
The three main ways are more work, more capital (tools, machines, buildings) and better ideas.
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