Unit 5 Vocab Flashcards
Investment tax credits
Lower tax obligation for a business when it invests in physical capital
Infrastructure
Roads, power lines, ports, and other underpinnings for economic activity
Crowding out
When govt deficit drives up int. Rate and leads to reduces investment spending
Physical capital
Manufactured goods used to make other goods and services ADD through Investment from peoples savings indirectly through loans OR directly through stocks or corporate bonds
Human capital
Knowledge and skills of the workforce ADD education, training, and increasing the sized of the LF
Technology
Collective body of knowledge, technical means of producing goods and services ADD research and development
Natural Resources
Land-anything from the earth ADD discovery
Productivity
Amount of output produced by the average worker
Real GDP per capita
Real GDP per population amount, key statistic used to track economic growth
Long run Econ growth
Sustained increase in the quantity of goods and services the economy can produce as opposed to short run ups and downs of the business cycle.
Money neutrality
No real long run effects on Econ from changes to the money supply in particular when Econ at full employment
Velocity of money
Measure of the number of times average bill is spent in a year, tend to fluctuate more now
National debt
Accumulation of all past deficits minus all past surpluses
Quantity theory of money
POS relationship between agg. Price level and the money supply. In the long run, growth rate of money supply determine growth of the price level(inflation rate)
