Chapter 11 & 12 Vocabulary Flashcards
percentage change in real gdp per capita
economic growth
the inputs used to produce goods and services
factor of production (resources)
the resource represented by the quantity, knowledge, and skills of the workers in the economy
human capital
a significant practice, relationship, or organization whiten a society
institution
individuals can own property and when they use the property to produce output they own that output
- house
- land
- resources
private property rights
determines the length of time necessary for a sum of money to double at a particular growth rate
rule of 70
what allows for sustainable growth the knowledge a variable for use in production
technology / technological advancement
describes the relationship between all inputs used in the macroeconomy and the economy total output
aggregate production function
per capita gap’s across nations equalize as nations approach the steady state
convergence
replace, lose value/usefulness
depreciation
the marginal product of an input falls as the quantity of the input rises
diminishing marginal product
growth driven by factors inside an economy
endogenous growth
growth that is independent of factors inside an economy
exogenous growth
the change in output associated with one additional unit of an input
marginal product
investment - depreciation
net investment
a model of economic growth based on a production function for the economy
solow model
an approach to long-run growth that focuses on technological change and the incentives fostering innovation inside an economy
new growth theory
the condition of a macroeconomy when there is no new net investment
steady state
