What does the term 'economic growth' typically refer to?

The term 'economic growth' typically refers to an increase in the production of goods and services over time. This concept is measured by the rise in a country's real Gross Domestic Product (GDP), which is the total value of all goods and services produced within a nation, adjusted for inflation. Economic growth indicates an expansion of the economy, signifying that businesses are producing more and, ideally, that this leads to enhanced living standards and job creation.

When the production of goods and services rises, it generally reflects greater efficiency, innovation, or increased resources, which can lead to higher income levels for individuals and more opportunities for investments. This growth can also provide the government with higher tax revenues, which can be used to fund public services and infrastructure improvements.

In contrast, while a decrease in unemployment rates, the improvement of income equality, and consumer spending are important aspects of an economy, they are not definitions of economic growth itself. They may be outcomes or related factors that can result from economic growth, but they do not encapsulate the concept as directly as the increase in production of goods and services does.