Economic growth is one of the most important things that people can do to improve their lives. It can raise living standards, reduce poverty and increase happiness. It also brings huge benefits to the environment, society and culture.
Economic growth occurs when there is an increase in the economy’s factors of production (land, labor, capital, and entrepreneurship). The most common way this happens is through technological improvements, which can lower the cost and increase the quality of goods produced. Another way is to grow the size of the workforce, which can increase productivity through more efficient use of existing resources. Finally, growing the amount of land or mining resources can increase production through higher output per unit of time.
To measure economic growth, economists look at the market value of everything a country produces each year. This number is called gross domestic product, or GDP. A country with a bigger GDP is considered to have more economic growth than a country with a smaller one. However, GDP doesn’t tell us much about how a country’s citizens are doing. For example, a worker who stays home to take care of children or an elderly relative contributes to GDP, but doesn’t make it feel better for anyone.
There are a lot of time, money and energy being poured into efforts to promote economic growth. So, it’s important to know whether those efforts are working. The best indicator is the rate of growth, which can be measured by comparing GDP from year to year.