The economy is said to be growing when the total output of a country is increasing.
This means that the value of all the goods and services a country produces is increasing over a given period of time, and the capability of the economy to produce is also improving.
Economic growth is usually measured by an increase or decrease in GDP (Gross Domestic Product).
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Key terms:
Real economic growth – the growth rate of a country’s economy adjusted for inflation.
Nominal economic growth – the growth rate of a country’s economy not adjusted for inflation.
Total output – the value (amount) of all final goods and services which are produced in a given amount of time.