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

The term 'economic growth' specifically refers to an increase in the level of sales and production in an economy. This concept is typically measured by the rise in a country’s Gross Domestic Product (GDP), which reflects the total value of all goods and services produced over a given period. When an economy experiences growth, it signifies that businesses are producing more goods and services, leading to higher levels of consumption and investment.

Increased production and sales often correlate with improved living standards, as more goods and services typically lead to more job opportunities and greater availability of products for consumers. Thus, economic growth is a critical indicator of economic health and development, influencing policies, investment decisions, and overall economic strategies.

While factors like production costs, employment rates, and inflation are relevant to economic conditions, they do not directly define economic growth itself. An increase in production costs or inflation rates could potentially accompany economic growth but are not indicators of it. Similarly, while an increase in the employment rate can result from economic growth, it is not synonymous with it.