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10 Cards in this Set
- Front
- Back
Physical capital
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the stock of equipment and structures that are used to produce goods and services
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Productivity
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the quantity of goods and services produced from each unit of labor and input
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The determinants of productivity (4)
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1. Physical capital per worker
2. Human capital per worker 3. Natural resources per worker 4. Technological knowledge |
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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 resources
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the inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits
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Technological knowledge
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society's understanding of the best ways to produce goods and services
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Diminishing returns
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the property whereby the benefit from an extra unit of an input declines as the quantity of the input increases
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catch-up effect
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the property whereby countries that start off poor tend to grow more rapidly than countries that start off rich
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The saving and investment trade-off
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Because resources are scarce, devoting more resources to producing capital requires devoting fewer resources to producing goods and services for current consumption.
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Foreign direct investment
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A capital investment that is owned and operated by a foreign entity.
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