WHAT IS ECONOMIC GROWTH

Economic growth is a measure of the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP.

To understand this concept, let's break it down:

1. Economy: This refers to the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.

2. Goods and Services: These are the output produced by the economy. Goods are tangible items like cars, food, and clothing. Services are intangible items like education, healthcare, and transportation.

3. Gross Domestic Product (GDP): This is the total value of everything produced by all the people and companies in the country. It doesn't matter if they are domestic or foreign companies. If they are located within the country's boundaries, the government counts their production as GDP.

4. Real Gross Domestic Product: This is a macroeconomic measure of the value of economic output adjusted for price changes (i.e., inflation or deflation). This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.

5. Percent Rate of Increase in Real GDP: This is the rate at which the economy's production of goods and services increases over time. This is how we measure economic growth.

In summary, economic growth is an increase in the production of goods and services in an economy. Increases in capital goods, labor force, technology, and human capital can all contribute to economic growth. Economic growth is commonly measured in terms of the increase in aggregated market value of additional goods and services produced, using estimates such as GDP.