Ch. 7 TB Notes – Wealth of Nations ^0 Economic Growth

Economic Growth

The increase in the value of goods and services produced by an economy over time.

GDP per Capita

The gross domestic product divided by the population of a country, representing an average economic output per person.

Infant Survival Rate

The percentage of infants who survive to age 5 in a given population.

Correlation

A statistical relationship between two variables, showing how one may affect the other.

Poverty Line

The minimum level of income deemed adequate in a particular country.

Human Capital

The skills, knowledge, and experience possessed by an individual, considered in terms of their value or cost to an organization.

Physical Capital

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

Technological Knowledge

Understanding of how to use tools, processes, and systems to produce goods and services.

Exponential Growth

A process whereby a quantity increases by a consistent percentage over time.

Rule of 70

A formula to estimate the number of years required to double an investment at a fixed annual rate of return by dividing 70 by the expected rate of return.

Growth Miracles

Rapid economic growth experienced by some countries in a short period.

Growth Disasters

Economic decline or stagnation experienced by a country after previously experiencing growth.

Competitive Markets

Markets where many firms compete for customers, leading to lower prices and improved products.

Institutions

The laws, regulations, and organizational structures that shape economic behavior.

Property Rights

Legal rights to use and derive benefit from a resource.

Corruption

Dishonest or fraudulent conduct by those in power, typically involving bribery.

Political Stability

The durability and integrity of a current government regime, characterized by consistent governance.

Economic Indicators

Statistics that provide information about the economic performance of a country.

Income Distribution

How a nation’s total GDP is distributed amongst its population.

Material Goods

Physical items that are produced and consumed, including electronics, clothing, and food.

Social Mores

The accepted traditional customs and usages of a particular social group.

Investment

The action of putting money into something to earn a financial return.

Sustainable Growth

Economic development that aims to meet the needs of the present without compromising the ability of future generations to meet their needs.

Globalization

The process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.

Standard of Living

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.

Economic Policies

Strategies by governments to influence their economies.

Market Economy

An economy in which production and prices are determined by unrestricted competition between privately owned businesses.

Resource Allocation

The process of distributing resources among various programs or projects.

Cultural Attitudes

Shared beliefs and values that influence individual and group behavior within a society.

GDP Growth Rate

The annual percentage increase in the value of a country’s gross domestic product.

Historical Trends

Patterns of development and change in structures, behaviors, or attitudes over time.

Trade Barriers

Government-imposed restrictions on the free exchange of goods and services between nations.

Sovereignty

The authority of a state to govern itself or another state.

Developing Nations

Countries with a lower GDP and a lower standard of living compared to developed countries.

Global Economic System

The integrated worldwide economic framework that influences and governs trade, investments, and financial transactions.

Landlocked Countries

Nations that do not have a coastline and are surrounded by land, which impacts their trade capabilities.

Arbitrary Rules

Laws or regulations that are determined by chance rather than being based on reason or system.

Economic Disparity

The unequal distribution of wealth and resources across different segments of society.

Labor Productivity

A measure of economic performance that indicates the efficiency of labor in producing goods.

Entrepreneurship

The process of starting and running a new business with the aim of making a profit.

Innovation

The act of introducing new ideas, products, or methods to enhance or improve services or processes.

Economic Engagement

The degree to which entities interact economically, often measured by trade and investment flows.

Global Competitiveness

The ability of a country to provide an environment that fosters economic growth and innovation.

Socioeconomic Factors

Social and economic characteristics that influence the behavior and outcomes of individuals or groups.