Economic Growth

Terms

  • GDP per capita: GDP divided by the size of the population; it is the equivalent measure of a country's economic output per person, often used to compare living standards across different nations.

  • Productivity: output per worker; it reflects efficiency in the economy and is a crucial factor in driving economic growth, and changes through physical capital, human capital, and tech

  • Economic growth is an increase in real GDP per capita over time, as reflected by outward shifts of the PPC and LRAS

  • Determinants of Economic growth: changes in levels of capital stock formation and tech. and the other determinants mentioned prior

  • An increase in new tech shifts the curve upward , leading to greater productivity and ultimately contributing to higher economic output. This results in a more efficient allocation of resources and improved living standards for the population.

  • Both shifts represent economic growth, and as shown on LRAS that economic growth = lower inflation / price level