Economic Growth Dynamics

These flashcards cover key terms and concepts related to economic growth, its drivers, and the essential ingredients for fostering a productive economy.

Economic Growth

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

GDP (Gross Domestic Product)

The total monetary value of all final goods and services produced within a country's borders in a specific time period.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, which contribute to economic productivity.

Physical Capital

The tools, machinery, and buildings used to produce goods and services.

Technological Progress

Improvements in technology that enhance production efficiency and lead to increased output.

Production Function

A mathematical relationship that describes how inputs are transformed into outputs.

Constant Returns to Scale

A situation in which increasing all inputs by a certain factor leads to an increase in output by the same factor.

Diminishing Returns

A principle stating that as the level of one input increases, holding others constant, the marginal gains in output will eventually decrease.

Catch-Up Growth

Rapid economic growth that occurs when a poorer country invests in capital to improve productivity.

Investment

The allocation of resources, usually monetary, to create an asset that will generate future income.