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17 Cards in this Set

  • Front
  • Back
Physical capial
the stock of equipment and structures that are used to produce goods and services
the amount of goods and services produced from each hour of a worker's time
Human capital
the knowledge and skills that workers acquire through education, training, and experience
Natural resources
the inputs int othe production of goods and services that are probided by nature, such as land, rivers, and mineral deposits
technological knowledge
society's understanding of the best ways to produce goods and services
diminishing returns
the property whereby the benefit from an extra unit of an input declines as the quantity of the input increases
catch-up effect
the property whereby contries that start off poor tend to grow more rapidly than countries that start of rich
combining many individual markets into one overall market
a period of time during which production falls and people lose their jobs
Nominal GDP
calculated by valuing all ouputs at current prices
Real GDP
calculated by valuing outputs of different years at common prices
inflation that occurs while the economy is growing slowly
Potential GDP
the real GDP the economy would produce if its labor and other reources were fully employed
structural unemployment
workers who have lost their job because their skills are no longer in demand
cyclical unemployment
rises when real GDP grows more slowly than potential GDP; falls when its opposite
frictional unemployment
due to normal turnover in the labor market--people in between jobs, etc.
real rate of interest vs. nominal
nominal doesnt account for inflation