Extract A
The island economy of Vancuria experienced a dramatic surge in activity, with real GDP expanding by 6.2% over the last fiscal year. This rapid economic growth was propelled by a tourism boom and unprecedented public infrastructure spending. However, the central bank has warned that the economy is now operating above its long-run trend capacity, leading to severe labour shortages and soaring wage demands. To prevent the economy from overheating, policymakers are debating whether to tighten monetary policy, which could abruptly halt the expansionary phase of the business cycle.
Define the term 'economic growth' (Extract A, line 2).
