Explain the difference between short term growth and long term growth

Short term growth is, as the name suggests, growth in the output of a country in terms of GDP over a given (short, usually a year) period of time. It is measured by the annual percentage change in GDP.

Long term growth however is when the country's productive potential is increased, the potential of the country's GDP is increased. Due to an expansion in eitherthe quality or quantity of factor inputs, the country is now able to produce more.

Both these concepts can be shown simply on an aggregate supply/aggregatedemand curve. SHort term growth would be shown by any movement along the x-axis (real GDP), and Long term growth shown by a shift to the right of the LRAS (long-run aggregate supply) curve.

DJ
Answered by David J. Economics tutor

56711 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Describe how diminishing marginal returns affect a firm's average cost.


What is meant by absolute poverty and analyse how access to clean water, or another essential item, is closely linked to production, income and wealth, within countries and between countries.


Why do higher interest rates cause the exchange rate of a currency to rise?


Assess the effect inflation will have on three macro-economic objectives (18)


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