Actual Growth vs Potential Growth
Given that scarcity exists i.e. there are limited resources available to satisfy unlimited human wants, many choices have to be made among the alternative uses of various resources to maximise the use of resources and to achieve the highest possible level of satisfaction. Economists have used the Production Possibility Curve (PPC) to illustrate this Central Problem of Economics.
Economic growth can be represented on this PPC as shown below.
Actual growth is represented by a movement from point A to point B while potential growth is represented by a movement from point B to point C.