Economic Growth is considered as an increase of the total amount of production of an economy from one year to the next. The most common measure of economic growth is Real Gross Domestic Product (real GDP). Real GDP is either the total income of an economy or the total expenditure of an economy after inflation has been taken into account, this helps to determine if a rise in GDP is due to inflation or economic growth. Another Form of real GDP is real GDP per capita. This is real GDP divided by the total population of a country. This is more useful for measuring the economic growth of a country because as it can determine if a change in real GDP is due to economic growth or just a growing population. It is also a useful measure for comparing the incomes of two countries that are vastly different in size eg. USA and New Zealand. An example of how inaccurate nominal GDP can be for measuring economic growth are shown by New Zealand's real and nominal GDP values in 1993, Nominal GDP was $NZ75, 220,000 while real GDP was only $NZ36, 500,000 (using 1960 as a base year.)
             The Two major reasons for economic growth are changes in factor endowments and increases in productivity. Factor Endowments are the total amount of resources a country has at its disposal. If a country suddenly finds a new oil field or has an increase in the amount of fish in its sea's it can suddenly achieve a higher national output, which will result in an increase in GDP. Also if new technology or an increase in employment suddenly allows an increase in productivity the economies output will once again be higher boosting GDP and causing economic growth.
             The following graph shows how an increase in factor endowments can affect economies productivity.
             Production Possibility Curve for Economy Z
             These PPF's show how the discovery of a resource related to Product Y can increase its total production.
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