Chapter 25 - Production and Growth

Technological knowledge

is the actual content and quality of certain items, whereas human capital is the time spent reading it.

Externality

: the effect of one persons actions on the well- being of a bystander.

Height

is reflected as an indicator of productivity- taller workers earn more.

Education

is an investment in human capital which has an opportunity cost.

Economic prosperity

depends on favorable political institutions.

Economic growth

can be fostered from the protection of property rights and promotion of political stability.

Brain drain

: the emigration of many of the most highly educated workers to rich countries, where the workers enjoy a standard of living Health and Nutrition.

Productivity

creates outputs for the economy.

standard of living

Inwardly oriented policies attempt to increase productivity and the by focusing domestically and cutting international communication.

Foreign investments

are a way for a countrys economy to grow.

Poor countries

tend to grow at faster rates than rich countries Investment from Abroad.

Property rights

: the ability of people to exercise authority over the resources they own.

High standards of living

are correlated with a larger amount of outputs How Productivity Is Determined.

Natural resources

: the inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits.

international data

To understand production and growth, on the GDP per person must be examined, as well as productivity and the link between it and the economic policies of a nation.

population growth

According to modern theories, reduces GDP per worker because rapid growth in the number of workers forces the capital stock to be spread more thinly.

Physical capital

: the stock of equipment and structures that are used to produce goods and services.

Technological knowledge

: societys understanding of the best ways to produce goods and services.

Productivity

is determined by physical capital, human capital, natural resources, and technological knowledge.

Productivity

: the quantity of goods and services produced from each unit of labor input.