Chapter 6 – Economic Growth Flashcards
Real GDP per capita
The real GDP per person, found by dividing real GDP by a countries population.
Economic growth
And increase either in real output or in real output per capita.
Rule of 70
A method for determining the number of years it will take for some measure to double, given its annual percentage increase, by dividing the percentage increase in to 70.
Modern economic growth
The historically recent phenomenon in which nations have experienced sustained increase in real GDP per capita.
Per capita GDP
Gross domestic product per person; the average GDP of the population.
Per capita income
I nations total income per person; the average income of the population.
Leader countries
As it relates to economic growth, countries a develop and use advanced technologies, which then become available to follower countries.
Follower countries
As it relates to economic growth, countries that adopt advanced technologies that previously were developed and used by leader countries.
Supply factors
An increase in the availability of a resource, and improvement in its quality, or an expansion of technological knowledge that makes it possible for an economy to produce a greater output of goods and services.
Demand factor
The increase in the level of aggregate demand the brings about the economic growth made possible by an increase in the production potential of the economy.
Efficiency factor
The capacity of an economy to combine resources effectively to achieve growth of real output that the supply factors make possible.
Full production
Employment of available resources so that the maximum amount of goods and services is produced.
Total spending
The total amount buyers of goods and services spend our plan to spend; also called aggregate expenditures.
Labor productivity
The average product of labor; output per worker per hour.
Labor force participation rate
The percentage of the working age population that is actually in the labor force.
Productivity growth
The percentage change in productivity from one period to another.
Infrastructure
The capital goods usually provided by the public sector for the use of its citizens and firms.
Human capital
The accumulation of prior investment in education, training, health, and other factors that increase productivity.
Economies of scale
Reductions in the average total cost of producing a product from expands the size of plant in the long run.
Real wage
The amount of goods and services worker can purchase with his or her nominal wage; the purchasing power of the nominal wage.
Information-technology
New and more efficient methods of delivering in receiving information using computers, fax machines, wireless phones, and the Internet.
Start up firm
A new firm focused on creating and introducing a particular new product or employing a specific new production or distribution method.
Increasing returns
An increase in affirms output by a larger percentage and the percentage increase in it’s inputs.
Network effects
Increases in the value of a product each user, including existing users, as the total number of users rise
Learning by doing
Achieving greater productivity and lower average total cost through games and knowledge and skill that a company repetition of a task; a source of economies of scale.
