Principles of Macroeconomics

A collection of vocabulary flashcards related to key concepts found in the Principles of Macroeconomics lecture notes.

Productivity

The average quantity of goods & services produced per unit of labor input.

Physical Capital

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

Human Capital

The knowledge and skills workers acquire through education, training, and experience.

Natural Resources

The inputs into production that nature provides, such as land and mineral deposits.

Technological Knowledge

Society’s understanding of the best ways to produce goods & services.

Diminishing Returns

The principle that, after a certain point, adding more of one input while holding others constant will yield lower per-unit returns.

The Catch-up Effect

The phenomenon where poorer economies grow faster than richer ones, as they can adopt existing technologies.

Foreign Direct Investment

A capital investment that is owned & operated by a foreign entity.

Public Good

A resource that is non-excludable and non-rivalrous, meaning it can be shared freely.

Malthusian view

The theory that suggests that population growth will outpace food production, leading to famine and poverty.

Inward-oriented policies

Economic policies that aim to raise living standards by protecting domestic industries.

Outward-oriented policies

Economic policies that promote integration with the world economy and eliminate restrictions on trade or foreign investment.

Economic Growth

An increase in the production of goods and services in an economy over a period of time.

Capital per worker (K/L)

The amount of physical capital available for each worker, affecting productivity.

Investment in Human Capital

Expenditures on education, training, and health that increase the productivity and efficiency of labor.

Property Rights

The legal rights to own, use, and manage resources, which are crucial for economic growth.

Corruption

The abuse of entrusted power for private gain, which can hinder economic growth.

Research and Development (R&D)

Investments in innovation and technology to improve productivity and economic growth.

Economic Institutions

The laws, regulations, and systems that govern economic behavior and transactions.

Brain Drain

The emigration of highly trained or qualified individuals from one country to another.

Investment Policies

Government strategies to boost savings and investment, enhancing economic productivity and growth.