Econ Ch 21: Economic Growth(Correctly solved)
business cycle correct answersalternating periods of economic expansion and economic
recession
way to increase standard of living correct answersincreasing production faster than population
growth
long-run economic growth correct answersthe process by which rising productivity increases the
average standard of living
how to measure long run economic growth? correct answersreal GDP per person [capita]
how to calculate # of years takes GDP to double correct answers70/Growth rate
labor productivity correct answersthe quantity of goods and services that can be produced by one
worker or by one hour of work
what causes labor productivity to increase? correct answers- quantity of capital per hour worked
- level of technology*
- government must provide secure rights to private property
capital correct answersmanufactured goods that are used to produce other goods and services
capital stock correct answersthe total amount of physical capital available in a country
human capital correct answersaccumulated knowledge and skills workers acquire from education
and training or from their life experience
technology correct answersrefers to processes a firm uses to turn inputs into outputs of goods and
services
potential GDP correct answersthe level of real GDP attained when all firms are producing at
capacity
retained earnings correct answersprofits that are reinvested in the firm rather than paid to the
firm's owners
financial system correct answersthe system of financial markets and financial intermediaries
through which firms acquire funds from households
financial markets correct answersmarkets where financial securities, such as stocks and bonds,
are bought and sold
financial securities correct answersdocument that states the terms under which funds pass from
the buyer of a security [who is lending the funds] to the sellers
business cycle correct answersalternating periods of economic expansion and economic
recession
way to increase standard of living correct answersincreasing production faster than population
growth
long-run economic growth correct answersthe process by which rising productivity increases the
average standard of living
how to measure long run economic growth? correct answersreal GDP per person [capita]
how to calculate # of years takes GDP to double correct answers70/Growth rate
labor productivity correct answersthe quantity of goods and services that can be produced by one
worker or by one hour of work
what causes labor productivity to increase? correct answers- quantity of capital per hour worked
- level of technology*
- government must provide secure rights to private property
capital correct answersmanufactured goods that are used to produce other goods and services
capital stock correct answersthe total amount of physical capital available in a country
human capital correct answersaccumulated knowledge and skills workers acquire from education
and training or from their life experience
technology correct answersrefers to processes a firm uses to turn inputs into outputs of goods and
services
potential GDP correct answersthe level of real GDP attained when all firms are producing at
capacity
retained earnings correct answersprofits that are reinvested in the firm rather than paid to the
firm's owners
financial system correct answersthe system of financial markets and financial intermediaries
through which firms acquire funds from households
financial markets correct answersmarkets where financial securities, such as stocks and bonds,
are bought and sold
financial securities correct answersdocument that states the terms under which funds pass from
the buyer of a security [who is lending the funds] to the sellers
