ECON-1010 Chapter Notes - Chapter 20: Human Capital, Forego

• School: Vanderbilt University
• Department: Economics
• Course: ECON-1010
• Professor: Hojjatallah Ghandi

Document Summary

Economic growth: an increase in the capacity to produce. If we are using all of our resources. Use terms like full-employment real gdp, full-employment output, and potential level of real gdp. Rule of 72: divide 72 by the rate of annual percent increase of a variable to get the approximate number of years it takes for the variable to double. Fluctuations in the economy in the short run are primarily determined by changes in total spending. Economic growth in the long run is largely determined by changes in our capacity to produce. A decrease in unemployment moves us towards the production possibilities frontier by putting more available resources to work, but it does not actually shift the ppf. Population growth increases the capacity to produce (but a larger population will need more production to maintain the same level of output/person)