1. Lesson 3: Economic Growth
Unit 3: Macroeconomics
Lesson 3: Economic Growth

2. Measuring Economic Growth
real GDP per capita: real GDP divided by the total population

3. Question #1: Why is real GDP per capita considered the best measure of standard of living? Explain.
A Comparison: real GDP in 2007
United States
$13.8 trillion
Canada
$1.3 trillion
A Comparison: real GDP per capita in 2007
United States
$13.8 trillion
303 million
$45,845
Canada
$1.3 trillion
33 million
$39,195

4. GDP per capita

5. Question #2: What is a fundamental flaw of using real GDP per capita to measure standard of living? Explain.

6. Measuring Economic Growth
GDP and Population Growth
● economic growth = percent change of real GDP over a given period of time
● a nation’s population grows over time
● So, real GDP must outpace population growth to improve standard of living!