ECON 222: Chapter 7 Vocabulary
21 Cards in this Set
Front | Back |
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Real GDP per Person
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The quantity of goods and services available for the average individual in the economy
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Growth Rate
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The annual percentage change in output
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Productivity
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The quantity of goods and services produced from each unit of labor input
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Physical Capital
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The stock of equipment and structures used to produce output.
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Factors of Production
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Inputs used in production, such as labor, capital, and natural resources.
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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 Resource
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Inputs into production provided by nature
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Renewable Resource
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Natural resource that can be reproduced
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Nonrenewable Resource
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Natural resource that is limited in supply
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Technological knowledge
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A society's understanding about the best ways to produce goods and services
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Production Function
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The relationship between inputs and outputs from production
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Constant returns to scale
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A production process where doubling all of the inputs doubles the output
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Diminishing Returns
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When the incremental increase in output declines as equal increments of an input are added to production.
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Catch-up Effect
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The property that poorer countries tend to grow more rapidly than richer countries.
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Foreign Direct Investment
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Capital investment owned and operated by foreigners
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Foreign Portfolio Investment
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Capital Investment Financed with Foreign money but operated by domestic residents.
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Externality
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When the actions of one person affect the well-being of a bystander
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Property Rights
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The ability of people to exercise control over their resources
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Infant-industry Argument
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Restricting international trade to protect fledgling domestic industry from foreign competition
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Inward-oriented Policies
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Policies that increase international trade restrictions
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Public Good
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A good that we may all use at the same time without diminishing another's benefits
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