AP Macroeconomics Flashcards: Economic Growth
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Review key ideas with interactive flashcards. This set includes 16 cards to help you master important concepts.
What does the aggregate production function show?
The aggregate production function shows that output per capita is positively related to both the amount of physical capital and human capital per capita.
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What does the aggregate production function show?
The aggregate production function shows that output per capita is positively related to both the amount of physical capital and human capital per capita.
What is physical capital per worker?
Physical capital per worker refers to the amount of tools, machinery, and structures available for each employed person in an economy.
What is the relationship between a shift in the PPC and a shift in the long-run aggregate supply (LRAS) curve?
An outward shift in the Production Possibilities Curve (PPC) is analogous to a rightward shift of the long-run aggregate supply (LRAS) curve, as both represent long-run economic growth.
What is the primary measure of economic growth?
Economic growth is measured as the growth rate in real GDP per capita over time.
A government program increases college graduation rates. How does this impact the aggregate production function and long-run growth?
This program increases human capital per capita, which leads to higher labor productivity and contributes to a rightward shift of the LRAS curve, promoting long-run economic growth.
How does the Production Possibilities Curve (PPC) illustrate economic growth?
Economic growth is represented by an outward shift of the Production Possibilities Curve, which indicates an increase in the economy's maximum potential output.
If real GDP per capita grows from $60,000 to $61,800 in one year, what is the economic growth rate?
The economic growth rate is 3%. The calculation is (($61,800 - $60,000) / $60,000) * 100.
How does the long-run aggregate supply (LRAS) curve represent economic growth?
Economic growth is shown as a rightward shift of the vertical long-run aggregate supply (LRAS) curve, indicating an increase in the economy's full-employment output.
What is human capital per worker?
Human capital per worker is the stock of knowledge, skills, and abilities that the average worker in an economy possesses.
How are aggregate employment and aggregate output related?
Aggregate employment and aggregate output are directly related because, holding other factors constant, firms must employ more workers to produce more output.
Define average labor productivity.
Average labor productivity is the total output per employed worker, serving as a key measure of an economy's efficiency.
If a nation invests heavily in new technology for its factories, which determinant of growth is being affected?
This action increases both the level of technology and the amount of physical capital per worker, which are key determinants of productivity and economic growth.
A country's real GDP is $5 trillion and its population is 200 million. What is its per capita GDP?
The per capita GDP is $25,000. This is calculated by dividing the real GDP ($5,000,000,000,000) by the population (200,000,000).
What are the key determinants of productivity?
Productivity is determined by the level of technology and the amounts of physical and human capital available per worker.
How do you calculate per capita GDP?
Per capita GDP is calculated by dividing a country's real Gross Domestic Product (GDP) by its total population.
Why is 'per capita' an important qualifier when measuring economic growth?
Using 'per capita' adjusts for population changes, providing a more accurate measure of the change in the average standard of living for individuals in a country.