Economic Growth
Economic growth is an increase in a country's output over time, which usually raises incomes and living standards.
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Economic growth is an increase in a country's output over time, which usually raises incomes and living standards.
- Investment and education drive growth
- Growth can harm the environment
- Sustainable growth balances both
🧠 Quick quiz
Three questions. Score 2 or more to complete the topic.
What is Economic Growth?
Within Economics & Civics, which covers money, markets, business, government, law and citizenship: how societies are organised and run, this topic explains Economic Growth. Economics and civics topics explain how money, markets, laws and government affect people, so each topic here pairs a clear definition with a model.
Check that you can explain Economic Growth in your own words and give one example from everyday life. If you can do that, you have understood the core idea.
Understanding Economic Growth helps you read the news critically and weigh up policies, choices and arguments about society.
Economic Growth in detail
Economic growth is an increase in the output of goods and services in an economy over time, usually measured as the percentage rise in real GDP. It can result from more resources (labour, capital), better technology, a more educated workforce and improved infrastructure.
Growth raises incomes, creates jobs, increases tax revenue for public services and may reduce poverty. However, it can cause pollution, resource depletion, inequality and may not benefit everyone equally. This leads to debate on sustainable growth. Economies go through cycles of boom and slowdown. Governments use policies to promote steady growth.
How the interactive helps you understand Economic Growth
Watch the growth curve in the interactive. Use any sliders or buttons it offers to change the values and see how the growth curve responds.
Before you change anything, predict the result. Then change one value at a time and check whether your prediction was right. This is a quick way to build a correct mental model of Economic Growth.
Real-life uses and examples
- Give a balanced answer about Economic Growth by considering more than one point of view.
- Relate Economic Growth to a news story about prices, jobs, elections or government spending.
- Use Economic Growth to weigh up the pros and costs of a policy or decision.
Common mistakes to avoid
- Confusing a short-term effect with a long-term one.
- Giving an opinion without evidence or a clear economic or civic reason.
- Learning the definition without testing it. Use the quiz and the interactive to check that you can apply the idea.
Frequently asked questions about Economic Growth
What is Economic Growth?
Economic growth is an increase in a country's output over time, which usually raises incomes and living standards.
What are the most important points about Economic Growth?
The main points are: Investment and education drive growth; Growth can harm the environment; Sustainable growth balances both.
Why is Economic Growth useful?
Understanding Economic Growth helps you read the news critically and weigh up policies, choices and arguments about society.
How can I practise Economic Growth?
Open the interactive at the top of this page and change the controls one at a time. Predict the result before each change, then take the three-question quiz. A score of two or more marks the topic as complete on this device.
Which topics are related to Economic Growth?
Related topics in Economics & Civics include Business Costs and Revenue, Production and Productivity, Fair Trade.