Chapter 10: The Long Run

A collection of vocabulary flashcards focused on key concepts in long-run economic growth, essential for understanding macroeconomic principles.

Long-run economics

The study of how economies perform over extended periods, focusing on growth and productivity.

Standard of living

A measure that reflects the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Real output per person

The inflation-adjusted amount of goods and services produced per individual, an important measure of economic performance.

Malthusian era

A historical period characterized by stagnation of output per person due to limits on resources.

Force of compounding

The principle that growth accumulates and accelerates over time, leading to significant increases in output.

Convergence

The theory that poorer economies will tend to grow at faster rates than richer economies, leading to a decrease in income disparity.

Returns to scale

The relationship between the increase in output to the increase in inputs; can be constant, increasing, or decreasing.

Aggregate production function

A mathematical representation of how total output is produced from a given set of inputs such as labor and capital.

Technological progress

Improvements in technology that enhance productivity and efficiency in the production process.

Capital accumulation

The growth in wealth or assets, particularly through investment in physical goods that contribute to production.