Causes of Economic Growth in the Short-Run

Changes in short-run aggregate demand

An incraese in AD results in a rise in real GDP = positive economic growth.

AD = C + I + G + (X - M)

C,I,G are known as domestic demand.

X and M are reffered to as net external demand.

Short-run economic growth can occur because of both domestic and international demand.

Changes in short-run aggregate supply

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