Unit 5: Growth & Productivity

AP Test:

• 4-10% of Multiple Choice
• 3-6 Multiple Choice Questions
• Concepts may be embedded in FRQs but will not be the main focus.

Major Topics:

A. Growth Models in Economics: Production Possibilities, Business Cycles, & LRAS

B. Investment in human capital

C. Investment in physical capital

D. Research and development, and technological progress

E. Growth policy

College Board Description:

This unit will examine how long-run economic growth occurs. Students should understand the role of productivity in raising real output and the standard of living, and the role of investment in human capital formation and physical capital accumulation, research and development, and technical progress in raising productivity. Having learned the determinants of growth, students should examine how public policies influence the long-run economic growth of an economy.