Skip to main content
Back

PPF - Growth Analysis definitions

Control buttons has been changed to "navigation" mode.
1/15
  • Production Possibilities Frontier
    Graphical representation of an economy's maximum output combinations of goods given available resources and technology.
  • Capital Goods
    Items used to produce other goods and services, such as machinery or factories, contributing to future productivity.
  • Consumer Goods
    Products intended for direct use by individuals to satisfy personal needs and wants.
  • Economic Growth
    Expansion of an economy's productive capacity, allowing for increased output of goods and services.
  • Supply Factors
    Elements like natural resources, human capital, capital goods, and technology that enable potential output expansion.
  • Natural Resources
    Raw materials such as oil or minerals that can be utilized to increase production capabilities.
  • Human Capital
    Skills, education, and productivity of workers that enhance an economy's output potential.
  • Capital Stock
    Accumulated assets like machinery and infrastructure used to produce goods and services.
  • Technology
    Innovations and improvements that boost productivity and efficiency in production processes.
  • Potential GDP
    Maximum possible output an economy can achieve when all resources are fully and efficiently utilized.
  • Demand Factors
    Conditions ensuring that increased output is purchased by households, businesses, and government.
  • Productive Efficiency
    Optimal use of resources to produce goods at the lowest possible cost.
  • Allocative Efficiency
    Resource allocation that best matches consumer preferences and maximizes societal well-being.
  • Scarcity
    Limited availability of resources, necessitating choices about production and consumption.
  • Opportunity Cost
    Value of the next best alternative forgone when choosing one option over another.