Ch 17 - Growth and Productivity: Long-Run Possibilities

Question 1

economic growth

Answer 1

an increase in output (real GDP); an expansion of production possibilities

Question 2

production possibilities

Answer 2

the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology

Question 3

real GDP

Answer 3

the time period used for comparative analysis; the basis for indexing, e.g., of price changes

Question 4

growth rate

Answer 4

percentage change in real output from on period to another

Question 5

GDP per capita

Answer 5

= total GDP / total population; average GDP

Question 6

labor force

Answer 6

all persons over age 16 who are either working for pay or actively seeking paid employment

Question 7

employment rate

Answer 7

the percentage of the adult population that is employed

Question 8

productivity

Answer 8

output per unit of input, for example, output per labor-hour

Question 9

human capital

Answer 9

the knowledge and skills possessed by the workforce

Question 10

net investment

Answer 10

= gross investment - depreciation

Question 11

crowding out

Answer 11

a reduction in private-sector borrowing (and spending) caused by increased government borrowing

Question 12

crowding in

Answer 12

an increase in private-sector borrowing (and spending) caused by decreased government borrowing

Question 13

geometric growth

Answer 13

an increase in quantity by a constant proportion each year

Question 14

arithmetic growth

Answer 14

an increase in quantity by a constant amount each year