5.6

Economic Growth

AP Macroeconomics

Measuring economic growth

The production function

Sources of economic growth

1. Physical capital accumulation

2. Human capital accumulation

3. Technological progress

4. Natural resources

Growth and the PPC

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Economic growth shifts the PPC outward

Growth and the LRAS

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Economic growth shifts LRAS to the right

The rule of 70

Diminishing returns to capital

Convergence hypothesis

Key vocabulary

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