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Economic growth occurs when the market value of goods and services in an economy over a period of time increase compared with each other. Generally, economic growth is measured by examining the total internal local product (GDP) of the economy, however, due to inflation, economists and analysts often like to measure the economic growth rate of change in real annual percentage GDP and the percentage change in GDP per capita annually. Real GDP growth measures how quickly an economy is expanding, while GDP per capita measure of the ability of people to buy goods and services in a country. In this way, the impact of inflation is removed from the calculation of economic growth.
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