Australia’s Economic Performance Syazwan Abdul Basher
1. The definition, types, causes and effects of the following economic indicators:
(a) Economic Growth
What is Economic Growth?
Economic growth is the increase in value and amount of goods and services that is produced by an economy for needs of a population over a period of time. The economic growth is measured according to the GDP adjusted for inflation; real gross domestic product. The GDP is essentially the final value of goods and services produced by a nation.
Economic growth is defined as the rate of growth of the whole income of a nation and is the most efficient indicator of an economy 's health... And wealth.
• Potential growth – Potential growth is the increase in an economy’s productivity potential; the growth in the long run.
• Actual growth – Actual growth is the change in the real GDP (Gross Domestic Product) of an economy.
Causes of Economic Growth
In general, the main cause for economic growth is the increase in mass demand. As the population demand for more goods and services, the more of it will be produced. Therefore, the demands will raise the level of real GDP (gross domestic product).
The aggregated demand consists of several expenses in the economy; consumer spending, investment, government expense, imports and exports, all add up to the aggregated demand. With the demands rising, an economy is able to grow, as it will cause the GDP to rise. These demands generally fall into