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Economic growth in a city, state, or country is characterized by steady growth in the productive capacity of the economy or a growth of national income (Fernandez- Villaverde, 2001). The Gross Domestic Product (GDP) growth rate is most commonly used to measure economic growth because it is a reflection of the total change in a country’s national output (Filardo, 1999). This growth rate is used to predict the direction of an economy. A positive growth rate indicates a positive economy with more jobs, consumption and income while a negative growth indicates an economic decline (Filardo, 1999). Economic growth constitutes superior productivity, prosperity, and increased capital per capita resulting in a higher quality of living. Conversely, economic decline can lead to a higher percentage of unemployment and scarcity of resources (Morrison, 1972). The GDP growth rate mirrors the economic growth rate in that the GDP growth rate is comprised of two components: population growth and labor productivity (Fernandez- Villaverde, 2001). For this reason, the GDP growth rate should be used in…
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