What is meant by economic growth?

Economic growth refers to the increase in the production of goods and services in an economy over a period of time, which is most commonly measured by the rise in real Gross Domestic Product (GDP). Real GDP distinguishes economic output adjusted for inflation, providing a more accurate picture of an economy's health and growth compared to nominal GDP. When we say there is a steady increase in real GDP over time, we are looking at a sustained upward trajectory in economic activity, which can lead to improvements in living standards, higher employment opportunities, and increased income levels for individuals.

The other choices touch on important economic concepts but do not define economic growth per se. For example, a decrease in unemployment rates can be a consequence of economic growth, but it is not a complete definition. Similarly, a rise in the prices of goods and services refers to inflation, which can occur independently of economic growth. Reduction in national debt can be a fiscal policy goal and may support conditions favorable for growth, but it does not directly describe what economic growth is.