Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

KEY TERMS

Question

Rule of 70
Labor productivity
Productivity
Physical capital
Human capital
Technological progress
Aggregate production function
Diminishing returns to physical capital
Growth accounting
Total factor productivity
Research and development (R&D)
Infrastructure
Convergence hypothesis
Sustainable long-run economic growth
a hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology.
human-made resources such as buildings and machines.
accounting that estimates the contribution of each of the major factors (physical and human capital, labor, and technology) in the aggregate production function.
spending to create new technologies and prepare them for practical use.
an advance in the technical means of production of goods and services.
output per worker; a shortened form of the term labor productivity.
the amount of output that can be produced with a given amount of factor inputs.
output per worker; also referred to as simply productivity. Increases in labor productivity are the only source of long-run economic growth.
long-run growth that can continue in the face of the limited supply of natural resources and the impact of growth on the environment.
a mathematical formula that states that the time it takes real GDP per capita, or any other variable that grows gradually over time, to double is approximately 70 divided by that variable’s annual growth rate.
in an aggregate production function when the amount of human capital per worker and the state of technology are held fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity.
a principle of economic growth that holds that international differences in real GDP per capita tend to narrow over time because countries that start with lower real GDP per capita tend to have higher growth rates.
the improvement in labor created by the education and knowledge embodied in the workforce.
physical capital, such as roads, power lines, ports, information networks, and other parts of an economy, that provides the underpinnings, or foundation, for economic activity.