Economic Growth
All 7 Economic Growth terms in the AP Economics glossary — each with a clear, exam-accurate definition. Tap any term for the full explanation, formula, and related interactive graph.
Economic growth is a sustained increase in an economy's real output, usually measured as the rise in real GDP or real GDP per capita.
Human capital is the knowledge, skills, and health embodied in workers that make them more productive.
Physical capital is the stock of manufactured tools, machinery, equipment, and structures used to produce goods and services.
Productivity is the amount of output produced per unit of input, most often output per worker or per hour worked.
The catch-up (convergence) effect is the tendency for poorer economies to grow faster than rich ones because capital has higher returns where it is scarce.
The aggregate production function links an economy's total output to its inputs—physical capital, labor, human capital, and technology—at the economy-wide level.
Growth accounting decomposes the growth of output into contributions from capital, labor, and total factor productivity (the Solow residual).