Economic growth is the increase in the market value of everything a country produces from one year to the next. This measurement is called gross domestic product (GDP), and it includes all the goods and services that a nation makes or provides, such as food, housing, clothing, education, and medical care. It also counts anything that a nation sells, including its natural resources like oil and minerals. The value of these products is boosted by the use of advanced technology, which enables workers to combine labor and materials in novel ways that create more valuable products.
There are many different kinds of economic growth, but the most important one is sustainable, long-term growth. It’s what allows a country to continue to make more wealth without having to increase its workforce or output in an unsustainable way. Long-term growth can be fueled by new infrastructure investments, using monetary policy to encourage borrowing, or gaining better tools and equipment that enable people to work more efficiently.
In the most basic form of economic growth, a country increases its supply of available labor by growing its population or improving labor productivity. This allows more people to plow the fields, mine the minerals, and produce more goods and services. More labor produces more wealth, and as the economy grows wealthier, consumers spend more on items that boost their own quality of life. Economic growth can also occur when a resource becomes more widely available or when there’s a breakthrough in finding new resources.