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