What is economic growth?
Economic growth is the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced.
How to measure growth?
Economic growth is measured as the annual percent change of gross domestic product (GDP). A better way of measuring economic growth is real GDP per capita. It is calculated by
Real GDP/size of the population
How to achieve economic growth?
The following factors can help to achieve economic growth
Capital accumulation
Investment in capital equipment that is used by people at work is the key to economic growth. These resources will enable the workforce to produce consumer goods more efficiently.
Technological Progress
Improvement in technology will lead to more goods being produced from available resources. The country will have achieved a higher gross domestic product.
Improvement in quality of human resources
Improving the quality of existing workforce can lead to increased productivity and hence optimum utilisation of resources. The quality of human resource can be improved with education, training and healthcare.
Research and development
Discovering new sources of natural resources will add to the total output of the country.
