Chapter 20 Flashcards
Aggregate production function
The process whereby an economy as a whole turns economic input such as human capital,physical capital, technology into output measured as gdp per capita
Capital deepening
An increased by society in the average level of physical and or human capital per person
Compound growth rate
The rate of growth when multiplied by a base that includes past gdp growth
Contractual rights
The rights of individuals to enter into agreements with others regarding the use of their property providing recourse through the legal system in the event of non compliance
Convergence
Pattern in which economies with low per capita incomes grow faster than economies with high per capita income
Human capital
Accumulated skills and education of workers
Industrial revolution
The widespread use of power driven machinery and the economic and social changes that occurred in the first half of the 1800s
Infrastructure
A component of physical capital such as roads and rail systems
Innovation
Putting advances in knowledge to use in a new product or service
Invention
Advances in knowledge
Labor productivity
The value of what is produced per worker or per hour worked; sometimes called worker productivity
Modern economic growth
The period of rapid economic growth from 1870 onward
Physical capital
The plant and equipment that firms use in production (this includes infrastructure)
Production function
The process whereby a firm turns economic inputs like labor, machinery, raw materials into outputs like goods and services that consumers use
Rule of law
The process of enacting laws that protect individual and entity rights to use their property as they see fit. Laws must be clear, public, fair enforced ,and applicable to all members of society
