Final answer:
Economic growth is measured by the change in real GDP, reflecting a country's increased production of goods and services and indicating an improved standard of living. A growth rate above 3% is generally seen as favorable. National statistical agencies typically measure this economic indicator.
Step-by-step explanation:
Economic growth is measured by the percentage change in real gross domestic product (GDP), which is the total value of goods and services produced within a country in a year, adjusted for inflation. A continual increase in the production of goods and services indicates growth, which in turn can lead to an improved standard of living. This includes increases in income, population growth, and higher education levels. The standard or good measure of economic growth is often considered to be a growth rate of more than 3%.
GDP can be measured by the sum of all purchases in an economy or by the total produced goods and services. It is commonly tracked by national statistical agencies or economic institutions. Since it factors in inflation, it reflects the real progress of an economy, not just increased output due to raising prices.