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Flashcards in Chapter 5 Terms Deck (12):

an increase in the quantity of goods and services a nation can produce

Economic growth


the production of more goods and ser­vices because business firms are using more land, labor, or financial capital

Extensive growth


the production of more goods or services by using existing factors of production with greater efficiency

Intensive growth


items that are purchased for personal use

Consumer goods


items that are used to produce consumer
goods; also called real capital

Capital goods


the allocation of limited resources to produce either consumer goods or capital goods

consumer goods/capital goods tradeoff


describes a business firm that uses a great deal of human labor relative to real capital

Labor intensive


describes a business firm that uses more automated equipment than human labor

Capital intensive


a viewpoint maintaining that each person in the nation has a right to a part of the nation’s wealth simply because he is a part of the human race

egalitarian fairness


an equal distribution of the nation’s income regardless of each person’s ability to contribute to its pool of wealth

economic leveling


a viewpoint maintaining that the only economic right to which citizens are entitled is the right to own and use property free of governmental interference and that the accumulation of wealth is the sole responsibility of each individual

libertarian fairness


another name for the libertarian view of economic fairness allowing for a “survival of the fittest” in the accumulation of wealth

economic Darwinism