Economists Define Economic Growth as

question 84

Multiple Choice

Economists define economic growth as

• A) changes in real GDP from year to year that occur as aggregate demand and short-run aggregate supply change.
• B) an increase in the standard of living of a nation.
• C) an increase in nominal GDP combined with price stability.
• D) the process through which the economy's potential output is increased.

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Definitions:

Normal Goods

Goods for which demand increases when income increases, and falls when income decreases, but price remains constant.

Inferior Goods

Products whose demand decreases as the income of consumers increases, reflecting a preference shift to higher-quality substitutes when affordability allows.

Price Elasticity

An assessment of the responsiveness of the demand for a product to variations in its price.

Supply

The total amount of a specific good or service that is available to consumers at a given price level and time.