Chapter 6 – Economic Growth

Question 0

Real GDP per capita

Answer 0

The real GDP per person, found by dividing real GDP by a countries population.

Question 1

Economic growth

Answer 1

And increase either in real output or in real output per capita.

Question 2

Rule of 70

Answer 2

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.

Question 3

Modern economic growth

Answer 3

The historically recent phenomenon in which nations have experienced sustained increase in real GDP per capita.

Question 4

Per capita GDP

Answer 4

Gross domestic product per person; the average GDP of the population.

Question 5

Per capita income

Answer 5

I nations total income per person; the average income of the population.

Question 6

Leader countries

Answer 6

As it relates to economic growth, countries a develop and use advanced technologies, which then become available to follower countries.

Question 7

Follower countries

Answer 7

As it relates to economic growth, countries that adopt advanced technologies that previously were developed and used by leader countries.

Question 8

Supply factors

Answer 8

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.

Question 9

Demand factor

Answer 9

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.

Question 10

Efficiency factor

Answer 10

The capacity of an economy to combine resources effectively to achieve growth of real output that the supply factors make possible.

Question 11

Full production

Answer 11

Employment of available resources so that the maximum amount of goods and services is produced.

Question 12

Total spending

Answer 12

The total amount buyers of goods and services spend our plan to spend; also called aggregate expenditures.

Question 13

Labor productivity

Answer 13

The average product of labor; output per worker per hour.

Question 14

Labor force participation rate

Answer 14

The percentage of the working age population that is actually in the labor force.

Question 15

Productivity growth

Answer 15

The percentage change in productivity from one period to another.

Question 16

Infrastructure

Answer 16

The capital goods usually provided by the public sector for the use of its citizens and firms.

Question 17

Human capital

Answer 17

The accumulation of prior investment in education, training, health, and other factors that increase productivity.

Question 18

Economies of scale

Answer 18

Reductions in the average total cost of producing a product from expands the size of plant in the long run.

Question 19

Real wage

Answer 19

The amount of goods and services worker can purchase with his or her nominal wage; the purchasing power of the nominal wage.

Question 20

Information-technology

Answer 20

New and more efficient methods of delivering in receiving information using computers, fax machines, wireless phones, and the Internet.

Question 21

Start up firm

Answer 21

A new firm focused on creating and introducing a particular new product or employing a specific new production or distribution method.

Question 22

Increasing returns

Answer 22

An increase in affirms output by a larger percentage and the percentage increase in it’s inputs.

Question 23

Network effects

Answer 23

Increases in the value of a product each user, including existing users, as the total number of users rise

Question 24

Learning by doing

Answer 24

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.