Prices, growth, and productivity (Chapters 5-7) Flashcards
1
Q
price index (PIt)
A
= price in period “t” / price in base year x100
2
Q
price level
A
- price index computed from prices of broad groups of goods and services
3
Q
consumers price index (CPI)
A
- price index of commodities commonly bought by consumers
4
Q
inflation rate (IRt)
A
- per cent change in a price index from one period to another.
= price index (PIt) - (PIt-1) / (PIt-1) x 100
5
Q
implicit price index (IPIt)
A
= nominal expenditure “t” / real expenditure “t” x100
6
Q
nominal GDP
A
- value of economy’s production at current prices
7
Q
real GDP
A
- value of economy’s production at base period (constant prices)
= nominal GDP “t” / implicit price index (IPI) “t” x 100
8
Q
economic growth
A
- per cent change in real GDP from one period to another
= realGDP “t” - real GDP “t-1” / real GDP “t-1” x 100
9
Q
catchup effect
A
- countries that start off poor tend to grow more rapidly than countries that start off rich
10
Q
productivity
A
- amount of goods and services produced per unit of time
11
Q
determinants of productivity
A
- physical capital
- human capital
- natural resources
- technology
12
Q
physical capital
A
- machinery, computers, building, tools
13
Q
human capital
A
- knowledge and sills of workers
14
Q
natural resources
A
- water, forests, mineral deposits, etc
15
Q
technology
A
- seems to be the main factor of productivity
