Chapter 17: Economic growth: Resources, technology, ideas and institutions

Question 1

Absolute Real Economic Growth

Answer 1

An increase in Real GDP from one period to the next.

Question 2

Per-Capita Real Economic Growth

Answer 2

An increase from one period to the next in per-capita Real GDP, which is Real GDP divided by population.

Question 3

Production Function

Answer 3

A function that specifies the relation between technology and the quantity of factor inputs to output or Real GDP.
Real GDP = T (L, K)

Question 4

Human Capital

Answer 4

The knowledge and skills a person acquires through education, training and experience.

Question 5

Institution

Answer 5

The rules of the game in a society or, more formally, the humanly devised constraints that shape human interaction; the rules and regulations, laws, customs and business practices of a country.

Question 6

3 Cunductive institutions to economic growth

Answer 6

• Property rights structure
• The legal system
• Growth-promoting policies versus transfer-promoting policies.

Question 7

New growth theory & technology

Answer 7

Holds that technology is endogenous;

Question 8

Neoclassical growth theory & technology

Answer 8

Holds that technology is exogenous

Question 9

Endogenous

Answer 9

Part of the economic system, under our influence or control.

Question 10

Exogenous

Answer 10

Not part of the system. It is assumed to be given to us often because mystical through a process we do not understand.