CH 11 Flashcards
can be defined as either long-run increases in real GDP or long-run increases in real GDP per capita
Economic Growth
application of mechanical power to the production of goods and services which began in England around 1750. First significant economic growth
Industrial Revolution
a change in the quantity of output a firm can produce using a given quantity of inputs
technological change
the quantity of goods and services that can be produced by one worker or by one hour of work
labor productivity
accumulated knowledge and skills that workers acquire from education and training or life experiences
human capital
the relationship between real GDP per hour worked and capital per hour worked, holding the level of technology constant
per- worker production function
smaller increases in output resulting from increasing one factor of production progressively higher while keeping the other factors of production constant
diminishing returns
developed by Paul Romer; a model of long-run economic growth that emphasizes that technological change is influenced by economic institutions and so is determined by working of market system. Accumulation of knowledge capital is key determinant of economic growth
new growth theory
benefiting from goods and services you do not pay for
free riding
exclusive right to produce a product for a period of 20 years from the date it is applied for
patent
grant the exclusive right to use creation during and 70 years after the creator’s lifetime
copyright
prediction that the level of GDP per capita in poor countries will grow faster than rich countries
catch up
factors to explain why low-income countries are growing slowly? (4)
- Failure to enforce rule of law
- wars and revolutions
- poor public education and health
- low rates of saving and investment
the purchase of building by a corporation of a facility in a foreign country
foreign direct investment
the purchase by an individual or a firm of stocks and bonds issued in another country
foreign portfolio investment
