So you're playing as Belgium on day 1. You press the "expand the logging camps in Flanders" button, and here's what happens:
You start using your daily 15 construction points for the expansion. 5 of them are the free base amount, and the other 10 are from your construction sector, which is set to use iron-frame buildings. This uses 100 iron, 80 wood, 20 tools, and 40 fabric per week in total, which increases the demand for those goods on your market and therefore their prices. This increases the profit of your buildings that produce those goods (or modifies the profit if your trade routes that deal in them, if you have any). (Because this is government construction, those goods get paid for out of your national budget, but that doesn't have any direct knock-on effects; number just goes down.) That profit goes, in the case of Belgium at the start of the game, mostly to the capitalist-class pops1 that are considered owners of those buildings, which increases their net income (gross income minus taxes and costs of goods they need to support their lifestyle), which if it's enough leads to their standard of living number going up. (Some of the profit also gets reinvested into the investment pool, which is money that gets automatically used to help pay for construction materials for buildings, of certain types depending on your current economic law, and the national budget get some tax income depending on your tax law.) When their standard of living goes up, that makes them more loyal to your government, which increases the approval rating of the interest group they belong to (which in the case of these capitalists is the industrialists), and also increases the political clout of that interest group. The approval rating of each of your country's interest groups determines which of that group's special bonus traits (like reduced technology costs in the production tech tree if the industrialists like you, or reduced tax income from manufacturing buildings if they dislike you) are active, and also whether it's radicalized, which means you can't include it in your government and it might try to start a revolution to bring your laws more in line with what it currently prefers. Political clout has a bunch of effects regarding your government and politics, but I wanted to focus on the economy, so never mind.
When the expansion of your logging camps finishes, that just scales it up, so it uses more tools to produce more wood and hardwood (depending on your production methods), and employs more workers (and also gets a 1% (up to a maximum, depending on your researched technologies) "economy of scale" bonus to its throughput, increasing usage and production of goods, and therefore profit since the amount of wages paid doesn't change). Those workers usually come from subsistence farms, which is good overall because that means their income and standard of living goes up, though it does also mean that you produce a little less of all the things that come from subsistence farms (grain, liquor, furniture, clothes, etc.), increasing prices. The increased wood production of your expanded logging camps reduces the market price of wood, and since wood is a potential pop need, being in both the crude items category for low-wealth pops and the heating category for all wealth levels, that means that it contributes to increasing the net income and standard of living of your whole country.
I've left a bunch of things out here for the sake of brevity, and I probably got some details wrong since I've only played this game for 90 hours and I don't understand the mechanics super well yet, but the point is that Victoria 3 has a large number of moving parts and everything that happens has a million knock-on effects, and at first it seems like the game is completely random and just runs itself totally outside of your control, but eventually it all makes sense, and I think it's neat and fun. Well, that's my story.
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A pop is a subset of the workforce of your country. You have a pop for, I think, each combination of job, culture, religion, and place of work in your country, so there's one pop for all your Wallonian Catholic machinists working at your logging camps in Wallonia, one for Flemish Catholic capitalists running the paper mills in Flanders, etc. Each pop can represent any number of people, containing a number of loyalists and radicals and having its own standard of living.
