Economic growth
| English | Chinese | Pinyin |
|---|---|---|
| business cycle | 经济周期 | jīng jì zhōu qī |
| economic growth | 经济增长 | jīng jì zēng zhǎng |
| real GDP | 实际GDP | shí jì GDP |
| inflation | 通货膨胀 | tōng huò péng zhàng |
| living standards | 生活水平 | shēng huó shuǐ píng |
| recession | 衰退 | shuāi tuì |
| inequality | 不平等 | bù píng děng |
Booms, busts and the cycle
- Economies don't grow at a steady pace — they speed up, overheat, slow down, and recover, again and again.
- This rhythm is the business cycle 经济周期, and growth is its long-run trend.
Economic growth is measured by an increase in:
Growth is a rise in real GDP — output adjusted for inflation.
What economic growth 经济增长 is
- Economic growth = an increase in a country's real GDP 实际GDP (the total value of output, adjusted for inflation 通货膨胀).
- Sustained growth raises average incomes and living standards 生活水平.
Investment in new buildings and machines adds to a country's capital and drives economic growth
Economic growth
Growth shifts the whole frontier outward — the economy can now produce more of both goods.
A recession is usually defined as:
Two quarters of falling real GDP signals a recession.
The repeated pattern of booms and recessions is the business ______.
Output cycles around the rising long-run trend.
The business cycle
- Output swings through boom → slowdown → recession 衰退 → recovery, around the rising trend.
- A recession is two quarters in a row of falling real GDP.
Real output cycles through booms and recessions while the long-run trend rises.
Real GDP strips out the effect of inflation.
Real GDP measures actual output, not just higher prices.
Which are potential costs of economic growth? (Select all that apply.)
Higher incomes is a benefit; the others can be costs.
Costs and benefits of growth
- Benefits: higher incomes, more jobs, better public services.
- Costs: possible inflation, inequality 不平等, and environmental damage.
Growth means real GDP, not just bigger numbers. If prices rise 5% and output figures rise 5%, real output hasn't grown at all. Always strip out inflation.
You've got it
- economic growth = a rise in real GDP → higher living standards
- the business cycle: boom → slowdown → recession → recovery
- growth brings higher incomes but risks inflation and environmental cost