Chapter 11 Flashcards
industrial revolution
the application of mechanical power to the production of goods beginning in England around 1750
economic growth model
a model that explains growth rates in real GDP per capita over the long run
labor productivity
the quantity of goods and services that can be produced by one worker or by one hour of work
technological change
a change in the quantity of output a firm can produce using a given quantity of inputs
human capital
the accumulated knowledge and skills that workers acquire from education and training from their life experiences
per-worker production function
the relationship between real GDP per hour worked and capital per hour worked, holding the level of technology constant
new growth theory
a model of long run economic growth that emphasizes that technological change is influenced by economic incentives and so is determined by the working of the market system
patent
the exclusive right to produce a product for a period of 20 years from the date the patient is applied for
catch-up
the prediction that the level of GDP per capita (or income per capita) in poor countries will grow faster than in rich countries
property rights
the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it
rule of law
the ability of a government to enforce the laws of the country, particularly with respect to protecting private property and enforcing contracts
foreign direct investment
the purchase or building by a corporation of a facility in a foreign country
foreign portfolio investment
the purchase by an individual or a firm of stocks or bonds issued in another country
globalization
the process of countries becoming more open to foreign trade and investment
