Economic growth is measured in gross domestic product (GDP), or the total value of all goods and services produced. The percentage of growth or decline, compared to the previous year, is adjusted for inflation. Therefore, if growth was 5% and inflation was 2%, GDP would be reported at 3%. As prices rise, the value of the dollar declines, as its purchasing power erodes with each increase in the price of basic goods and services.Read more: Inflation And Economic Recovery | Investopedia http://www.investopedia.com/financial-edge/0212/inflation-and-economic-recovery.aspx#ixzz47DS22beO Follow us: Investopedia on Facebook
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