This document defines and provides examples of key terms related to economic growth. It discusses: - Economic growth is defined as an increase in a country's production of goods and services, and is positively associated with quality of life. It is measured in currency terms. - Economic growth rate is the percentage change in real GDP from one period to the next. - GDP per person divides a country's total GDP by its population to compare living standards between countries and over time. - Population growth rate is the percentage change in a population from one period to the next. - Examples are provided to demonstrate calculating growth rates of real GDP, population, and real GDP per person.

1. Economic Growth
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2. Economic Growth
 Economic Growth is an increase in the capacity of an economy to
produce goods and services.
 Higher economic growth is positively associated with an
increased quality of life or standard of living.
 Measured in currency.
 Economic changes can be positive or negative.

3. Economic Growth Rate
 An economic growth rate is a measure of economic growth from
one period to another.
 It is expressed in percentage.
Formula:
Growth rate = Real GDP in _ Real GDP in
of real GDP current year previous year x 100
Real GDP in previous year

4. Example:
 If real GDP in the current year is $8.4 trillion and if real GDP in the previous year was
$8.0 trillion, growth rate of real GDP is:
Growth rate = Real GDP in _ Real GDP in
of real GDP current year previous year x 100
Real GDP in previous year
= $8.4 trillion - $8.4 trillion x 100
$8.0 trillion
= 5%

5. GDP Per Person
 GDP Per Person is a measurement of the total economic
output of a country divided by the number of people.
 It's used to compare the standard of living between countries
and over time.
 = GDP .
Population of the country.

6. Population Growth Rate
 Population Growth Rate is the increase in the number of individuals in
a population.
 It is expressed in percentage.
 Growth of = Pop. In the _ Pop. In the
Population current year previous year x 100
Pop. In the previous year

7. Example 1:
Current year:
 In the current year, when real GDP $8.4 trillion, the population is
404 million.
 GDP per = $8.4 trillion
person $202 million
= $41, 584

8. Example 1:
Previous year:
 In the previous year, when real GDP was $8.0 trillion, the
population was 400 million.
 GDP per = $8.0 trillion
person $200 million
= $40, 000

9. Example 1:
Use these two values of real GDP per person in the growth formula to
calculate the growth rate of real GDP per person.
It is:
Growth rate of real = $41,584 - $40,000 x 100
GDP per person $40,000
= 4%

10. Example 2:
The growth rate of real GDP per person can also be calculated by
using the formula:
Growth of real = Growth rate of – Growth rate of
GDP per person real GDP population

11. Example 2:
 If real GDP in the current year is $8.4 trillion and if real GDP in the previous year was
$8.0 trillion, growth rate of real GDP is:
Growth rate = Real GDP in _ Real GDP in
of real GDP current year previous year x 100
Real GDP in previous year
= $8.4 trillion - $8.4 trillion x 100
$8.0 trillion
= 5%

12. Example 2:
Current year:
 When real GDP was $8.4 trillion, population was 202 million.
Previous year:
 When real GDP was $8.0 trillion, population was 200 million.
Growth of = 202 million – 200 million x 100
Population 200 million
= 1 %

13. Example 2:
Growth of real = Growth rate of – Growth rate of
GDP per person real GDP population
Growth of real = 5 % - 1 %
GDP per person
= 4%

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