Business, Legal & Accounting Glossary
In an economic context, growth refers to an overall increase in economic activity. Often, growth is used to measure an increase in GDP, trade, or overall financial power or capacity. Economic growth has been defined in economics as an increase in an economy’s potential to generate goods and services. It is measured on the basis of two or more successive economic periods. However, there are other ways of measuring economic growth as well including nominal terms and real terms. Nominal terms include indicators like inflation. In real terms, nominal terms that are used for measuring economic growth are adjusted against inflation.
Quite often gross domestic product per capita or gross domestic product is used for purposes of measuring economic growth of a particular economy. Economic growth is also measured in terms of percentage increase of real gross domestic product. Economic growth should not be limited only to the enhancement of the productive potential of a country. Betterment in overall living standards of people living in an economy is also included in the concept of economic growth.
Economic growth is also normally related to progress in technological tools employed in a particular economy. A major example of economic growth is expressed in terms of technological advancement is the United States of America. Invention and use of the internet helped industries and other businesses in the USA to flourish.
A boom is a period in an economy where the volume of business and sales activities goes up at a rapid pace. As far as share markets are concerned boom is related to bull markets. Bear markets are related to busts. It has been observed that bull and bear markets normally follow each other.
The economic growth rate is a measurement of economic growth. It is measured in percentage terms, from one particular period to another. It is basically a nominal expression and is not adjusted against inflation. In practical terms, the economic growth rate is used to measure advancement in the gross domestic product of a nation in terms of years.
In economics, expansion is a business cycle whereby an economy progresses from a difficult period to an extremely good one. In a period of economic expansion business activities surge to unprecedented levels and the gross domestic product reaches its peak. Expansion is also called economic recovery.
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This glossary post was last updated: 29th March, 2020 | 5 Views.