UTK: Economics 201 - Chapter 6

  1. Definition: the ratio of a specific measure of output, such as real GDP, to a specific measure of input, such as labor; in this case productivity measures real GDP per hour of labor.
  2. Definition: Output per unit of labor; measured as real GDP divided by the hours of labor employed to produce that output.
    Labor Productivity
  3. Definition: The relationship between the amount of capital per worker in the economy and average output per worker.
    Per-Worker Production Function
  4. Definition: An increase in the amount of capital per worker; one source of rising labor productivity.
    Capital Deepening
  5. Definition: The formal and informal institutions that promote economic activity; the laws, customs, manners, conventions, and other institutional elements that determine transaction costs and thereby affect people's incentive to undertake production and exchange.
    Rules of the Game
  6. Definition: Economically advanced capitalist countries of Western Europe, North America, Australia, New Zealand, and Japan, plus the newly industrialized Asian economies of Taiwan, South Korea, Hong Kong, and Singapore.
    Industrial Market Countries
  7. Definition: Countries with a low living standard because of less human and physical capital per worker.
    Developing Countries
  8. Definition: The search for knowledge without regard to how that knowledge will be used.
    Basic Research
  9. Definition: Research that seeks answers to particular questions or to apply scientific discoveries to develop specific products.
    Applied Research
  10. Definition: The view that government - using taxes, subsidies, and regulations - should nurture the industries and technologies of the future thereby giving these domestic industries an advantage over foreign competition.
    Industrial Policy
  11. Definition: A theory that the standards of living in economies around the world will grow more similar over time, with poorer countries eventually catching up with the richer ones.
Card Set
UTK: Economics 201 - Chapter 6
Chapter 6 Key Terms