Macroeconomics Chapter 8

Economic Growth

An increase in real GDP occurring over some time period.

Real GDP per capita

Real GDP divided by the population, measuring the average economic output per person.

Percent change in growth

The formula used to calculate the rate of economic growth over a specified time period.

Rule of 70

A formula to estimate the number of years required to double GDP: 70 divided by the annual growth rate.

Supply Factors of Growth

Contributors to economic growth including natural resources, human resources, and capital goods.

Demand Factor

The increase in aggregate demand necessary for production potential growth.

Efficiency Factor

The capacity of an economy to effectively combine resources to achieve maximum output.

Modern Economic Growth

Sustained increases in real GDP per capita that are historically recent in human history.

Catching Up

When follower countries adopt technologies from leader countries to accelerate their economic growth.

Productivity Growth

An increase in the efficiency of production, often measured as output per worker per hour.

Multifactor Productivity (MFP)

The efficiency with which various factors of production are used together.

Labour Force Participation Rate

The percentage of the working-age population that is actively engaged in the labor force.

Economies of Scale

Cost advantages that firms experience as their output increases.

Institutional Structures

Essential frameworks, such as property rights and financial institutions, that promote economic growth.

Technological Advances

Innovations that significantly improve production efficiency and contribute to economic growth.

Real GDP

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

Human Capital

The skills, knowledge, and experience possessed by individuals that contribute to economic productivity.

Global Competitiveness Index

An index measuring a country's potential for economic growth based on various economic factors.

Average Output per Worker

A measure of labour productivity, indicating how much output is produced by each worker.

Natural Resources

Raw materials that are utilized in the production of goods and services.

Capital Goods

Tools, machinery, and buildings used to produce goods and services.

High-Productivity Employment

Jobs that yield greater output per worker compared to low-productivity jobs.

Structural Change

Shifts in the economy from industries with lower productivity to those with higher productivity.

Environmental Impact

The effect that economic growth and industrialization have on the natural environment.

Labor Inputs

The total amount of hours worked by the workforce in the production of goods and services.

Real Output

The total value of goods and services produced in the economy, measured in real terms.

Material Abundance

A condition achieved when economic growth leads to a sufficient supply of goods and services.

Standard of Living

The level of wealth, comfort, and material goods available to a population.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Public Investment

Government expenditure aimed at creating or improving economic infrastructure.

Born of Industrial Revolution

Characterization of the first major period of sustained economic growth beginning in the late 1700s.

Global Competition

The competitive environment faced by businesses as they operate on an international scale.

Real Wages

Wages that have been adjusted for inflation, reflecting the purchasing power of income.

Advanced Technologies

Innovations that enhance production processes and improve economic efficiency.

Economic Integration

The process by which countries reduce trade barriers to enhance mutual economic benefits.

Income Divergence

The growing disparity in income levels across different regions or countries.

Economic Efficiency

The optimal use of resources to achieve maximum productivity without waste.

Urbanization

The increase in the population living in urban areas, often linked to economic growth.

Education and Training

Investments aimed at improving the skills and capabilities of the workforce.

Sustainable Growth

Economic growth that meets the needs of the present without compromising future generations.

Cultural Impact

How economic growth influences social and cultural norms within a society.

Income Levels

The measurement of income received by individuals or groups within a specific time period.

Legal Frameworks

Laws and regulations that shape the economic environment and protect property rights.

Asset Accumulation

The process of building wealth and resources over time.

Social Mobility

The ability of individuals or groups to move within a social hierarchy, often influenced by economic growth.

Consumption Capacity

The ability of an economy to consume goods and services based on its available resources and income.