The gross domestic product (GDP) growth rate tells much about whether an economy is getting larger, which creates more jobs and will bring up the standard of living, or if it is getting smaller, jobs are being lost and the standard of living is going down.  Periods of positive growth rates are called expansions and periods of negative growth rates are called recessions.

The equation to derive the GDP growth rate (in real GDP) is:

Where:

Y = real GDP

t = the time period being assesed