Economic Growth

  

Categories: Econ, Tax

An economy grows when its capacity to produce goods increases, or when the market value of the goods and services it produces increases.

This can be a result of two things: inflation or real economic growth.

If the value of the goods and services produced increases by 1% from one year to the next, has the economy grown? Maybe, maybe not. If inflation is greater than or equal to 1%, then everything is valued at least 1% more, so the economy hasn't really grown. But if inflation is less than 1%, then the economy has grown.

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finance a la shmoop what is recession well here's one here's another and

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another and well here's an economic recession so technically when GDP [Set of teeth appear]

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enough from this most excellent chart that in most years GDP grows not

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massively but relatively steadily and with compounding the US has grown GDP

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maybe a half a percent a percent maybe two percent and you might not think

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decline of even 1% when we were expecting growth of two is a delta of 3%

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and that change is exacerbated with leverage when people fear for their job

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safety they stop buying those extra pairs of earrings at the mall they get [Woman biting her nails]

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one less tattoo and they stop making appointments at Botox Depot so all of

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the sudden activity in given quote luxury sectors or otherwise unquote just [Person receiving a tattoo]

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stops dead and there's a multiplier effect here as well because a wealthy

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banker who used to throw 20 parties a year now only throws four so all those [Calendar displaying party days appears]

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bartenders and oboe players and ice sculptors yeah they're all out of work

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as well and then they buy less beer and that new ice pick the sculptor was gonna

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buy yeah well she'll just sharpen her own and make do with it you know until

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recessions they're dangerous and credit high credit makes them all the more

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dangerous so be wary

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