Macro Chapter 12 - Production and Growth

productivity

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

physical capital

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

Human Capital

the knowledge and skills that workers acquire through education, training, and experience

Natural resources

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

technological knowledge

society’s understanding of the best ways to produce goods and services

diminishing returns

the property whereby the benefit from an extra unit of an input declines as the quantity of the input increases

catch-up effect

the property whereby countries that start off poor tend to grow more rapidly than countries that start off rich