Distinguish between Actual growth rate and Potential growth

Answer 1

Actual growth rate refers to the real growth of a country's economy that has occurred over a specific period of time. It is typically measured by comparing the country's Gross Domestic Product (GDP) from one period to another.

Potential growth, on the other hand, refers to the maximum economic growth that can be sustained over a long period of time without causing inflation or other negative consequences. It is determined by factors such as the country's labor force, technological advancements, and capital investments.

In summary, actual growth rate refers to the actual growth achieved while potential growth refers to the maximum sustainable growth that can be achieved in the long run.