EC140 Chapter Notes - Chapter 22: Capital Accumulation, Growth Accounting, Diminishing Returns

• School: WLU
• Department: Economics
• Course: EC140
• Professor: Angela Trimarchi

Document Summary

Real gdp growth rate = real gdp in current year real gdp in previous year x 100. Economic growth is a sustained expansion of production possibilities measured as the increase in real. Slow economic growth or the absence of growth can condemn a nation to devastating poverty and vice versa. The economic growth rate is the annual percentage change of real gdp: The standard of living depends on real gdp per person, which is real gdp divided by the population. Sustained growth of real gdp per person can transform a poor society into a wealthy one. Economic growth is a sustained, year-after-year increase in potential gdp. Labour, capital, land, and entrepreneurship produce real gdp, and the productivity of the factors of production determines the quantity of real gdp that can be produced. The relationship that tells us how real gdp changes as the quantity of labour changes when all other influences on production remain the same.