- Economic growth: an increase in real GDP.
- Actual growth: an increase in real GDP.
- Potential growth: an increase in capacity (right shift in LRAS or the PPF).
- Export-led growth leads to (X-M) increasing, causing AD to shift to the right. It also leads to job-creation and greater business profits, encouraging investment.
- 😦: over-dependence on the state of another economy

- Positive output gap: actual growth rate is greater than long run trend growth rate.
- Negative output gap: actual growth rate is below long run trend growth rate.
- Economic cycle: boom, downturn, recession, recovery.
- Boom: positive output gap, high inflation, low unemployment.
- Recession: negative output gap, low inflation, high unemployment.
- Economic growth leads to greater aggregate demand, greater job creation, lower unemployment, higher incomes, higher prices, greater investment, greater tax revenue.