Economic Growth - AP Macroeconomics

Gross Domestic Product (GDP). Total value of goods and services produced.

Average economic output per person. GDP divided by population size.

Can create conducive environment for investment and innovation. Fiscal and regulatory policies shape growth conditions.

Technological advancements. Expands economy's production possibilities over time.

Increase in capital per worker. Key component of economic growth strategy.

Higher investment in capital, boosting growth. Savings fund investment in productive capital.

Long-term economic growth driven by capital accumulation, labor, and technology. Explains how economies reach steady-state equilibrium.

Investment in infrastructure. Public capital improves overall productivity.

Growth rate of real GDP. Standard metric for comparing economic performance.

Job displacement. Automation can eliminate traditional jobs.

Provides stability and incentives for investment. Rule of law reduces business risks.

Retraining and education programs. Helps workers adapt to technological changes.

Full employment without accelerating inflation. Sustainable growth without inflationary pressure.

Relationship between inputs and output in an economy. Shows how resources transform into output.

Encourage investment and innovation. Legal protection promotes business confidence.

Income inequality. Benefits may not be distributed equally.

Improving productivity and economic efficiency. Policies targeting long-term production capacity.

Gross Domestic Product (GDP). Total value of goods and services produced.

Stimulates investment and consumption. Lower borrowing costs encourage spending and investment.

Enhances productive capacity. More capital tools boost worker productivity.

GDP will double. Rule of 70: $\frac{70}{5} = 14$ years to double.

Increases efficiency and output. New technologies improve production methods.

Solow Growth Model. Describes long-run equilibrium growth path.

Improves human capital, boosts productivity. Skilled workers are more productive and innovative.

Potential environmental degradation. Unsustainable resource use harms long-term growth.

Trade can enhance growth through increased markets and efficiency. Specialization and market access boost productivity.

Development of new products or processes. Creates new methods and improves efficiency.

Increases labor force, potential for higher output. More workers can increase total production.

Inflation reduces the real value of GDP. Real GDP accounts for price level changes.