Chapter 20 Key Terms Flashcards Preview

Macroeconomics Mid-Term Exam 1st Half > Chapter 20 Key Terms > Flashcards

Flashcards in Chapter 20 Key Terms Deck (18):
1

aggregate production function:

the process whereby an economy as a whole turns economic inputs such as human capital, physical capital, and technology into output measured as GDP per capita

2

capital deepening:

an increase by society in the average level of physical and/or human capital per person

3

compound growth rate:

the rate of growth when multiplied by a base that includes past GDP growth

4

contractual rights:

the rights of individuals to enter into agreements with others regarding the use of their property providing recourse through the legal system in the event of noncompliance

5

convergence:

pattern in which economies with low per capita incomes grow faster that economies with high per capita incomes

6

human capital:

the accumulated skills and education of workers

7

Industrial Revolution:

the widespread use of power-driven machinery and the economic and social changes that occurred in the first half of the 1800s

8

infrastructure:

a component of physical capital such as roads, rail systems, and so on

9

innovation:

putting advances in knowledge to use in a new product or service

10

invention:

advances in knowledge

11

labor productivity:

the value of what is produced per worker, or per hour worked (sometimes called worker productivity)

12

modern economic growth:

the period of rapid economic growth from 1870 onward

13

physical capital:

the plant and equipment used by firms in production; this includes infrastructure

14

production function:

the process whereby a firm turns economic inputs like labor, machinery, and raw materials into outputs like goods and services used by consumers

15

rule of law:

the process of enacting laws that protect individual and entity rights to use their property as they see fit. Laws must be clear, public, fair, and enforced, and applicable to all members of society

16

special economic zone (SEZ):

area of country, usually with access to a port where, among other benefits, the government does not tax trade

17

technological change:

a combination of invention - advances in knowledge - and innovation

18

technology:

all the ways in which existing inputs produce more or higher quality, as well as different and altogether new products