Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
24 Cards in this Set
- Front
- Back
|
4 supply factors:
|
1) Increase in quantity and quality of natural resources
2) Increases in quantity and quality of human resources 3) Increases in technology 4) Increases in the stock of capital goods |
|
|
Demand factor:
|
Increases in Total Spending
|
|
|
Efficiency Factor:
|
Using resources in least costly way to produce specific mix of G+S that maximizes well-being: Productive and Allocative Efficiency
|
|
|
Real GDP = ?
|
Hours of Work x Labor Productivity
|
|
|
Increases in economic growth/production-possibilities cause what and are caused by what?
|
Increases in long-run aggregate supply
· Supply factors |
|
|
Economic Growth is realized when? (factors quezstion)
|
Demand and efficiency factors increase to production possibilities curve set by supply factors
|
|
|
Growth accounting?
What does it watch specifically? |
The bookkeeping of the supply-side elements that contribute to changes in real GDP
(1) Hours of Work (2) Labor Productivity |
|
|
The average annual rate of increase in real GDP since 1950?
|
3.5%
|
|
|
Real GDP per capita in US since 1950 grew by average annual rate of?
|
2.3%
|
|
|
Largest contributor to productivity growth?
|
Technological Advance - 40%
|
|
|
Second major contributor to productivity growth?
|
Increased Capital - 30%
|
|
|
How does a nation typically acquire more capital?
|
Less Consumer Spending and More Capital Investment
|
|
|
Infrastructure?
|
Capital goods provided by the public for use of its citizens and firms in long-run (airports, freeways, wastewater treatment facilitie, etc)
|
|
|
Human capital?
|
The knowledge and skills that make a productive worker
|
|
|
Investment in human capital =?
|
Education and Training
|
|
|
Third major source of productivity growth?
|
Economies of scale (Reductions in per-unit cost)
|
|
|
Economies of scale result from?
|
Increases in Size of markets and firms
|
|
|
Fourth major source of productivity growth?
|
Improved Resource Allocation (Workers over time can move from low-time employment to high-time employment)
|
|
|
Rule of 70: If nation's productivity grows by 2.5% annually rather than 1.5%, Standard of Living will double in?
|
28 years, not 47 (70 divided by annual percent rate)
|
|
|
New Economy?
|
Name attached to US Economy since 1995 b/c of more productivity growth and economic growth
|
|
|
New Economy's Cause for productivity growth and economic growth changes?
|
Global Economy and Rapid Technological Advance
|
|
|
Reasons for Productivity Acceleration:
|
1) The Microchip and Information Technology
2) New Firms and Increasing Returns |
|
|
Increasing Returns?
|
When a firm's output increases by a larger percentage than the increase in its inputs
|
|
|
5 sources of increasing returns and economies of scale for start-up firms:
|
1) More specialized inputs (Results of investing in human capital)
2) Spreading of development costs over greater output 3) Simultaneous consumption (Ex: Software made once but is available to everyone) 4) Network effects (Increases in value of product to each user as total number of users rises. i.e. Internet e-mail) 5) Learning by doing (Perfected methods take less time to perform than unperfected methods) |
