Week 2 Economic Growth Review

These flashcards cover key concepts related to economic growth, including definitions, principles, and significant historical changes.

Real GDP

The total value of all goods and services produced in a country, adjusted for inflation.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time, typically consisting of expansion and contraction phases.

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another.

Real GDP per capita

A measure of a country's economic output that accounts for its number of people, representing the average economic productivity per person.

Industrial Revolution

A period of major industrialization that occurred during the late 18th and early 19th centuries, which transformed manufacturing processes.

Capital Deepening

The process of increasing the amount of capital per worker, leading to higher productivity.

Labor Productivity

The amount of goods and services produced by a worker in a given amount of time.

Technological Change

Improvements in processes or products that enhance a firm's ability to produce more output with the same or fewer inputs.

Diminishing Marginal Returns

A principle stating that as more of an input is added to a production process, the incremental output gains will eventually decrease.

Growth Rate of GDP

The percentage change in GDP from one period to the next, indicating economic growth or contraction.

Newly Industrialized Countries

Countries that have recently transitioned from developing to more industrialized economies, often marked by rapid growth.

Human Capital

The collective skills, knowledge, and experience possessed by an individual or population that contributes to economic productivity.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all and one person's use does not reduce availability to others.

Brain Drain

The phenomenon where highly educated or skilled individuals leave their home country to live and work in another country.

Rule of Law

The principle that the law applies to everyone equally, and government entities must enforce laws consistently.

Economic Prosperity

A state of economic well-being characterized by high levels of income, employment, and production.

Vicious Cycle of Low Savings and Investment

A situation where low levels of savings lead to low investment, which in return stifles economic growth.

Foreign Investment

Investment made by a company or individual in one country in business interests in another country, which can spur economic growth.

Environmental Concerns of Economic Growth

The potential negative impact of growth on the planet, including pollution and resource depletion.