Economic Growth
Economic growth is the annual percentage increase in real GDP, reflecting increased output capacity. Actual growth is the real GDP change from year to year; potential growth is the growth in productive capacity. Growth in developed economies averages 2-3% annually; developing economies often grow 5-7%.
Real World
China's real GDP grew at roughly 10% per year between 2000 and 2010, lifting over 400 million people out of poverty, but also producing severe air pollution in cities like Beijing and widening rural-urban inequality.
Exam Focus
Distinguish clearly between actual growth (short-run GDP change) and potential growth (long-run capacity increase) — mixing them loses marks.
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