What is economic expansion?
Economic expansion is synonymous with the more common term economic growth. The country's economy is considered to be economic expansion when gross domestic product (GDP) increases over a period of time. Expansion also occurs when GDP per capita increases in a certain time frame. GDP per capita is simply a full amount of GDP divided by the overall population. This can be considered as a market value or price for which the unit and services aggregate could be sold. GDP consists of four different components: consumption, investment, government purchases and clean exports. It is the largest component of GDP and is sometimes referred to as consumer expenditure of economic analysts. Increasing consumer expenditure is often an indicator of potential economic expansion.
The investment component of the GDP consists of a government asset and an increase in stocks. An example of an increase in stocks is the fleet of recently purchased military aircraft. Fixed assets of the government could include buildings used for housing political personalities.
Government purchases are the amount of expenditure minus the amount of transfer. Transfer payments consist of unemployment payments or subsidized housing payments. Government purchases will often be increased as a way to stimulate economic expansion if consumer expenditure slows down.
pure exports can be considered as the export of the Earth's minus its imports. The monetary value of the goods and services produced by the country is deducted from the number of goods and services it purchases. Imports are deducted to reflect the actual definition of GDP, which is the monetary value of the ground.
When GDP increases, the total standard of living of the country is also increasing. Increasing the standard of living is not only an indicator of economic expansion, but in itself. As for macroeconomic activities, most governments are highly desirable. Economic growth allows the government to increase flexibility in meeting its society needs.
growth occurs naturally or by government withTimulation. If people of the country have sufficient financial resources and perceive their individual financial state as stable, it is more likely to spend more. Sometimes referred to as consumers' trust, purchasing and expenditure formulas for the general population are often dictated by their average income and their perception concerning immediate financial future. If many fear the risk of loss of employment, the total expenses may be reduced. On the other hand, when many expect a salary or more lucrative job opportunities, total expenses can increase.