MODULE 37 Long-Run Economic Growth
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7 terms
Terms | Definitions |
|---|---|
 The Rule of 70 | the time it takes a variable that grows gradually over time to double is approximately 70 divided by that variable's annual growth rate. |
| Labor productivity, often referred to simply as productivity | output per worker. |
| Physical capital | consists of human-made goods such as buildings and machines used to produce other goods and services. |
| Human capital | is the improvement in labor created by the education and knowledge of members of the workforce. |
| Real GDP per Capita | the key statistic used to track economic growth. It is real GDP divide by population size. |
| Key source of growth | technology. technological advance and improvement in human capital go hand in hand |
| Why do economists focus on real GDP per capita as a measure of economic progress rather than on some other measure, such as nominal GDP per capita or real GDP? | because real gdp alone does not take the population size into account, which doesn't necessarily measure the living standard. nominal gdp does not take the changes of prices due to inflation into account. |
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