Solow model basic
The letter k usually represents this per worker.
Capital
Unlike Solow, this theory says growth comes from ____ factors.
Internal (or Endogenous).
The most common production function used in models.
Cobb-Douglas
This model uses a "fixed-coefficient" production function.
Harrod-Domar.
This curve represents equilibrium in the goods market.
The IS Curve.
When investment equals depreciation, the economy is in this "state."
Steady state
Education and training create this type of "capital."
Human Capital.
The "Solow ____" measures unexplained productivity growth.
Residual
Schumpeter’s term for new products replacing old ones.
Creative Destruction.
This curve represents equilibrium in the money market.
The LM Curve.
This term describes poor countries growing faster than rich ones.
Convergence
This model assumes constant returns to capital (Y = AK).
AK Model.
Total Factor Productivity is represented by this letter.
A
In Solow's model, tech growth is "____" (comes from outside).
Exogenous
Increasing government spending or cutting taxes will shift the IS curve in this direction.
Right (or Outward).
This "Rule" maximizes steady-state consumption.
Golden rule
Knowledge is "non-____" because many can use it at once.
Non-rival.
As you add more capital, the extra output falls; this is ____ returns.
Diminishing
Modern theory says these "rules of the game" drive growth.
Institutions
This 2-word term describes when high interest rates caused by government spending reduce private investment.
Crowding Out.
The rate at which capital wears out.
Depriciation
He won the Nobel Prize for his work on ideas and growth.
Paul Romer.
The percentage of income not consumed.
Savings Rate.
The "Knife-Edge" problem is associated with this model.
Harrod-Domar.
A "Liquidity ____" occurs when interest rates are so low that monetary policy loses its effect.
Trap