ECON 202: EXAM 2

Study Flashcards

13 Cards in this Set

Front	Back
Consumer price index	A measure of the overall cost if the goods and services bought by a typical consumer
Inflation rate	The % change in the price index from the preceding period
Producer price index	A measure of the cost of a basket of goods and services bought by firms
Indexation	The automatic correction by law or contract of a dollar amount for the effects of inflation
Nominal interest rate	The interest rate as usually reported without a correction for the effects of inflation
Real interest rate	The interest rate corrected for the effects of inflation
Physical capital	The stock of equipment and structures that are used to produce goods and services
Human capital	The knowledge and skills that workers acquire through education, training and experience
Natural resources	The inputs into the production of goods and services that are provided 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 increased
Catch-up effect	The property whereby countries that start off poor tend to grow more rapidly than countries that start off rich
Productivity	The quantity of goods and services produced from each unit of labor input