2.5.1 Causes of growth

2.5.1 Causes of growth

a) Factors which could cause economic growth
Key Factors effecting Short-Run Economic Growth

Key Factors effectng Long Run Economic Growth

b) The distncton between actual and potental growth
Actual growth – short run roftth – % increase in a country’s real GDP
Usually measured annually – caused by an increase in AD
Potental growth – lon run expansion of productve potental of an economy – caused by increases
in AS
Potental output of an economy is fthat it could produce if resources ftere fully employed