Chapter 7

Question 1

the capacity of production the economy can produce; how much an economy can produce using all resources

Answer 1

Economic growth

Question 2

How to use rule of 72

Answer 2

Divide 72 by the annual percentage change (actual number)

Question 3

Amount of output produced per hour of work

Answer 3

Productivity

Question 4

Ways to increase Productivity

Answer 4

1. ) inc physical capital
2. ) Inc in human capital
3. ) Improvement in technology

Question 5

Examples of Increasing Physical Capital

Answer 5

Factories, tools, machines, and houses used to produce goods and services

Question 6

Incentives for Physical Capital

Answer 6

Lowering taxes and borrowing from the bank (investing)

Question 7

Examples of Increasing Human Capital

Answer 7

skills and education that make workers more productive

Question 8

The knowledge of the best and most efficient ways to produce various goods and services

Answer 8

Technology

Question 9

Encourages Technology improvement

Answer 9

Patents and copyrights

Question 10

largest determinant of whether or not we have high or low production rate

Answer 10

Output per hour

Question 11

Factors that slow production growth

Answer 11

1. ) Slowdown in technological Progress
2. ) less investment as a part of GDP
3. ) Incr Competition due to inc international trade
4. ) Less effective education
5. ) inc regulation
6. ) Rising oil prices