Chapter 25 - Production and Growth

Productivity is the amount of goods and services

produced for each hour of a worker's time. It is linked to a nation's economic policies.

One variable responsible for most significant explanation of variations in living standards around the world is

productivity

In order to promote growth in living standards, policymakers must

protect property rights and maintain political stability.

Proprietary technology is knowledge that is known

only by the company that discovered it

Other things the same, which of the following would increase productivity?

An increase in either human or physical capital

Which of the following can be measured by the level of real GDP per person?

The standard of living but not productivity

Which of the following in an example of human capital?

The things you have learned this semester

Industrial machinery is an example of

a factor of production that is in the past was an output from the production process

In determining living standards, productivity plays a key role for

both nations and individuals

The catch-up effect refers to the idea that

it is easier for a country to grow fast and so catch-up if it starts out relatively poor.

In an economy where net exports are zero, if saving rises in some period, then in that period

consumption falls and investment rises.

The traditional view of the production process is that capital is subject to

diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.

A policy that increases saving will

improve economic growth and health outcomes

An understanding of the best ways to produce goods and services is called

technology

The key determinant of the standard of living in a country is

the amount of goods and services produced from each hour of worker's time.