What is the difference between short-run and long-run economic growth?

Short-run growth is simply an increase in a country's 'gross domestic product' or 'GDP', whereas long-run growth is an increase in the country's productive capacity. When thinking in terms of an AD-AS diagram, short run growth may be shown by an outward shift in aggregate demand which leads to an increase a long the "GDP" axis. Long run growth may be shown by an outward shift in AS, as this shows an increase in the country's productive capacity.

CH
Answered by Chet H. Economics tutor

14228 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What are the potential disadvantages of Trades Unions?


What is the relationship between income elasticity of demand and a normal and inferior good?


Assess macroeconomic policies which might be used to respond to rising commodity prices during a period of slow economic growth


What is the meaning of the term ‘Wealth Effect’?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences