Economic Growth Conditions

Economic growth (1) refers to an increase in (2) a country’s annual output (3) of goods and services. The measurement of output which is used to measure (4) economic growth is normally the Gross National Product (5) (GNP). However, the Gross Domestic Product (6) (GDP) is also used for this purpose.

The rate of economic growth (7) is often used as a measurement of changes in the standard of living (8). This means that it is changes in real GNP (9) which are important. Increases in GNP which are simply due to price increases cannot be treated as economic growth.

If changes in GNP are to be used to measure how the standard of living is changing, we must also take account of(10) population changes. For example, if real GNP increases by 3 percent in one year (11), but total population(12) also increases by 3 percent in the same year, there would be no change in the average(13) standard of living. It is growth in output per person (14) which makes higher living standards possible.

Economic growth can come about in two ways. First, a country may have many people out of work (15) and much capital and land lying idle (16). If these resources are put to work (17), GNP will increase. This is described as short-run growth (18) because, if other things do not change, there will be no further growth once full employment has been achieved(19). And second, even when all resources are fully employed, however, economic growth is still possible. Increases in the supplies (20) of labor and capital, and increases in the efficiency (21) with which economic resources are being used, will lead to increases in total output (22). This is described as long-run growth(23).

If a rich country and a poor country have the same rates of economic growth, the difference in their living standards will not stay the same, it will be getting larger and larger.

1. економічний розвиток; 2. підвищення; 3.річна продуктивність; 4.вимірювати; 5. валовий національний продукт; 6. валовий внутрішній продукт; 7. рівень екологічного розвитку; 8. життєвий рівень;

9. реальний ВНП; 10. враховувати; 11. підвищитися на 3 відсотки за один рік; 12. загальна кількість населення; 13. середній; 14. кількість продукції на людину; 15. безробітні люди; 16. не бути застосованим; 17. застосовувати; 18. короткострокове зростання; 19. досягти повного зростання; 20. ресурси; 21. ефективність; 22. загальний обсяг продукції; 23. довгострокове зростання.