What is the difference between short-run and long-run economic growth?

Short-run growth is simply an increase in a country's 'gross domestic product' or 'GDP', whereas long-run growth is an increase in the country's productive capacity. When thinking in terms of an AD-AS diagram, short run growth may be shown by an outward shift in aggregate demand which leads to an increase a long the "GDP" axis. Long run growth may be shown by an outward shift in AS, as this shows an increase in the country's productive capacity.

CH
Answered by Chet H. Economics tutor

17547 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

What is opportunity cost?


Explain what is meant by the rate of inflation and  analyse the main causes of inflation


Using a graph, provide reasons for the placement of a sales tax on alcohol. (5 marks)


What is bounded rationality?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning