Macroeconomics


recessions if they are mild and depressions



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Ebook Macro Economi N. Gregory Mankiw(1)

recessions

if they are mild and depressions if they are more severe. Not sur-

prisingly, periods of declining income are associated with substantial econom-

ic hardship.



Real GDP per Person in the U.S. Economy

Real GDP measures the total

income of everyone in the economy, and real GDP per person measures the

income of the average person in the economy. This figure shows that real

GDP per person tends to grow over time and that this normal growth is

sometimes interrupted by periods of declining income, called recessions 

or depressions.

Note: Real GDP is plotted here on a logarithmic scale. On such a scale, equal distances on

the vertical axis represent equal percentage changes. Thus, the distance between $4,000 and

$8,000 (a 100 percent change) is the same as the distance between $8,000 and $16,000 

(a 100 percent change).



Source: U.S. Department of Commerce and Economic History Services.


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