Economic growth is the term that was chosen for this work because despite its visual simplicity, it is rather complicated. At first sight, it seems that explanation of this term should be rather easy; however, there exist many details, which should be mentioned, and this is the main problem. It is rather difficult to do it without terms usage, and terms may cause additional problems because people, who are not knowledgeable in the sphere of economics, may not understand them.
Definition for the First Year Student
(Expansion techniques: Principle of Operation, context)
The term “economic growth” should be defined. Economic growth might be perceived as positive changes in the economic magnitudes. The real economic growth increases the nation’s wealth and enhances its potential for reducing poverty and solving other social problems. Economic growth is the thing that people want. Gerald Gordon in his work The Formula of Economic Growth of Main Street America (2010) defines the tern “economic growth” and points out that this term presupposes the improvement of the life on the local level, and it includes jobs’ number increase, and improvement of taxes and citizens’ welfare (p. 17).
It should be emphasized that economic growth is directly related to the supply, demand, and living standards. When the economic growth of the country is too quick, it starts developing quickly. Its productive capacity rises as well as the living standards of the country’s citizens, and it moves from the poor to the leading country. Economic growth has direct influence on GDP, and for that reason, it has significant impact on the country and its citizens.
When the country’s economic growth is too slow, it reduces the development of the country. One should understand that this century is the time of technologies and high standards. In order to keep up with the time, the coutry has to develop in order to catch up with others. Slow economic growth results in stagnation, as the country cannot reach the standards of the countries-leaders.
Definition for the Expert
(Expansion techniques: principle of operation, analogy)
Economic growth is the improvement of GDP level that occurs over the particualr amount of time. It can be also stated that economic growth can occur along with (1) an increase in the price level, (2) a decrease in the level, or (3) no change in the price level (Arnold, 2005, p.372). In other words, it means that it occurs when the total output of newly produced goods and services in an economy increases over time. Economic growth occurs when the national output increases, the quality of life and its people improves, and the country create conditions and opportunities for future prosperity. Economic growth is an outer shift in the nation’s production possibilities curve. Researchers McConnell, Brue, and Flynn discuss this in their work “Macroeconomics” (2014) and state that economic growth could be perceived as the skip over developmental and technological stages. It presupposes jumping to innovate and modern productive technology. Because of economic growth, pooere countries acquire an opportunity to experience increases in living standards (McConnell, Brue, & Flynn, 2014, p. 509).
The result of economic growth’s absence is economic stagnation and unemployment. The targeted rate of growth is achieved through shifting a proportion of domestic output from consumption to exports. The foreign exchange gap as well as the savings gap causes the limited output (Onyemelukwe, 2005, p.164).
In order to achieve the economic growth, the country should improve its economy on macro and micro levels. The macro level indicators include Gross National Product (GNP), Gross Domestic Product, per capita incomes, and the balance of payment situation. Whereas macro-level facttors are important as far as they attempt to summarize the performance of the entire economy, they fall short indicating the real situation as it affects the daily life of individuals and communities (Aghion, & Durlauf, 2010, p. 503). The micro-level indicators are essential as they describe the satisfaction with basic needs and fundamental social services. Improvement of macro level factors and micro level factors show that the economy is on its way to economic growth, and that current strategies really work.
Summary of Explanation
In conclusion, it should be stated that the difference between the definition for the first-year student and an expert’s definition lies foremost in the language, which was used. The definition for a student contains simple words and it is not overwhelmed with difficult or unknown terms. The expert’s definition is full of terms, like “GDP”, “GNP”, “macro-level indicators”, “micro-level indicators”, “national output”, etc. Moreover, the student’s definition contained the vocabulary that was easy to understand, technical details were omitted, and broad generalization was applied. The term was explained carefully with the help of common vocabulary. In the definition, which was conducted for the expert, details and crucial data were explained. The characteristics of the term were discussed using professional vocabulary. No generalization was used, bare facts and terms only.
The main difference between those two definitions lied in their essence. The definition for the person, who was unfamiliar with the field of economics, was rather rough and simple, with simple language and understandable vocabulary. The expert’s definition was rather dry and serious, without any additional explanations, the details of the term’s meaning were discussed and no introduction was used. An expert is familiar with the sphere of economics; this individual does not need any additional information and prelude.