Explain the difference between economic growth and stability. Can ...

[captainjonesify]

Explain the difference between economic growth and stability. Can a country experience both at the same time? Why or why not?
 
  What will be an ideal response?

Question 2

Potential GDP is also referred to as
 
  A) full-employment GDP. B) politico-economic GDP.
  C) realized GDP. D) balanced-budget GDP.

[cswans24]

Answer to Question 1

Economic growth refers to an increase in the total output of the economy. Stability occurs when output is steady or growing, with low inflation and full employment of resources. Yes, a country can experience both economic growth and stability at the same time, as long as the increase in output is not accompanied by a rising price level. The late 1990s were a period of growth for the U.S. economy with low inflation.

Answer to Question 2

A