Ch25 vocab - 8. Diminishing returns to physical capital-...

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Alex Yang Goetz-2 Econ IB SL 1 19 January 2009 Chapter 25 Vocabulary 1. Rule of 70- tells us that the time it takes a variable that grows gradually over time to double is approximately 70 divided by the that variable’s annual growth rate 2. Labor productivity- Output per worker 3. Productivity- Output per worker 4. Physical capital- consists of human made resources such as buildings and machines 5. Human capital- us the improvement in labor created by the education and knowledge embodied in the work force 6. Technology- is the technical means for the production of goods and services 7. Aggregate production function- a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital as well as the state of technology
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Unformatted text preview: 8. Diminishing returns to physical capital- Holding the amount of human capital and the state of technology fixed, each succession increase in the amount of physical capital leads to a smaller increase in productivity 9. Growth accounting- estimates the contribution of each major factor in the aggregate production function to economic growth 10. Total factor productivity- the amount if output that can be achieved with a given amount of factor inputs 11. Infrastructure- Roads, power lines, ports, information networks and other underpinnings for economic activity 12. Research and development- spending to create and implement new technologies 13. Convergence hypothesis- International differences in real GDP per capita tend to narrow over time...
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This note was uploaded on 01/22/2012 for the course ECON 101 taught by Professor Smith during the Spring '11 term at Art Inst. Boston.

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