Chapter 25 - Production and Growth

Vocabulary
Productivity


 * Definition: The quantity of goods and services produced from each unit of labor input.


 * What It Means:

Physical Capital


 * Definition: The stock of equipment and structures that are used to produce goods and services.


 * What It Means:

Human Capital


 * Definition: The knowledge and skills that workers acquire through education, training, and experience.


 * What It Means:

Natural Resources


 * Definition: The inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits.


 * What It Means:

Technological Knowledge


 * Definition: Society's understanding of the best ways to produce goods and services.


 * What It Means:

Diminishing Returns


 * Definition: The property whereby the benefit from an extra unit of an input declines as the quantity of the input increases.


 * What It Means:

Catch-Up Effect


 * Definition: The property whereby countries that start off poor tend to grow more rapidly than countries that start off rich.


 * What It Means: