growth and real gdp - Growth of Real GDP Business Cycles...

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Growth of Real GDP & Business Cycles Real GDP (Real Gross Domestic Product) – The total value of all final goods & services produced during a particular year or period, adjusted to eliminate the effect of changes in prices Measure to see growth or shrinking of economy Don’t include goods and services purchased for use as inputs in producing something else (flour used for pizza. If make flour but don’t sell it, count it as a good for that period) Only increase in number of product (not its price) would contribution to total output Nominal GDP (Gross Domestic Product) – the total value of final goods & services for a particular period valued in terms of prices for the period Business Cycle – The economy’s pattern of expansion, then contraction, then expansion again Economics go through periods of increasing & decreasing real GDP, but over time they generally more in the direction of increasing levels of real GDP (including US from 1960 – 2011)
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