Chapter 11 Flashcards
(14 cards)
Catch-up
The prediction that the level of GDP per capita (or income per capita) in poor countries will grow faster than in rich countries.
Economic growth model
A model that explains growth rates in real GDP per capita over the long run.
Foreign direct investment (FDI)
A firm’s purchasing or building of a facility in a foreign country.
Foreign portfolio investment
The purchase by an individual or a firm of stocks or bonds issued in another country.
Globalization
The process of countries becoming more open to foreign trade and investment.
Human capital
The accumulated knowledge and skills that workers acquire from education and training or from their life experiences.
Industrial Revolution
The application of mechanical power to the production of goods that began in England around 1750.
Labor productivity
The quantity of goods and services that can be produced by one worker or by one hour of work.
New growth theory
A model of long-run economic growth which emphasizes that technological change is influenced by economic incentives and so is determined by the working of the market system.
Patent
The exclusive right to produce a product for a period of 20 years from the date the patent application is filed with the government.
Per-worker production function
The relationship between real GDP per hour worked and capital per hour worked, holding the level of technology constant.
Property rights
The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it.
Rule of law
The ability of a government to enforce the laws of the country, particularly with respect to protecting private property and enforcing contracts.
Technological change
A positive or negative change in the ability of a firm to produce a given level of output with a given quantity of inputs.
