eli5 How do economies grow? Who grows them?

Question

eli5 How do economies grow? Who grows them?

In: 9

Answer 1

If I take a hillside that’s worth basically nothing and pull shiny rock out of it that is worth a dollar, I have grown the economy by turning useless hillside into valuable shiny rock.

If I take one dollar’s worth of shiny rock and turn it into a 10 dollar ingot of iron I have increased the economy by turning 1 dollar into 10.

And if I turn that 10 dollar ingot into 10 machine parts that are each worth 10 dollars individually I’ve increased the economy by turning 10 dollars into 100.