sparknotes
Economic Growth
Terms
Capital
-
Physical and intellectual property that is utilized by labor in the production
of goods and services.
Capital Expenditure
-
Money spent on increasing the amount of capital in a firm or an economy.
Capital Stock
-
The total amount of capital in an economy or in a firm.
Convergence
-
The theory that all industrialized countries tend to approach one
another over time in terms of GDP per capita.
GDP per Capita
-
Nominal GDP divided by the total population. This indicates the amount of
a country’s total output that each member of the population theoretical has
access to.
Golden Rule Level of Capital
-
The level of capital where consumption and savings are optimized.
Growth Level
-
The long term rate of growth.
Growth Rate
-
The short term rate of growth.
Human Capital
-
Intellectual property, like education and scientific discoveries, that affects
the level of output in a firm or country.
Industrialized
-
Describes countries that have an infrastructure and government amenable to
industrial development.
Infrastructure
-
Physical machinery and transportation that is in place to aid in
industrialization.
International Market
-
The market for goods and services that spans countries.
Labor
-
Workers who utilize capital to produce output.
Labor Productivity Growth
-
An increase in the amount of output a given unit of labor can produce.
Nominal GDP
-
The total currency value of all goods and services produced in a national
economy.
Open Market
-
A market for the sale and purchase of goods and services in which all countries
may compete.
Output
-
Goods and services produced by firms.
Physical Capital
-
Machinery used by labor in the production of goods and services.
Production
-
The creation of output.
Production Capabilities
-
The capital that allows a given amount of potential output.
Productivity
-
The ability to produce output.
Prosperity
-
The creation of a high standard of living.
Savings Rate
-
The percentage of total income that is saved for future consumption.
Standard of living
-
The level of economic wellbeing enjoyed by members of a population.
Technological Progress
-
The advancement of technology over time due to scientific discoveries.
Trade
-
The purchase and sale of goods and services between entities.
Unemployment
-
The condition of being without a job but also actively searching for
one.
Wage
-
Money paid or received in exchange for labor.
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