AP®︎ Macroeconomics: Topic 5.7 Flashcards

Master key terms and definitions for Topic 5.7 of AP Macroeconomics – Public Policy and Economic Growth to help you prep for quizzes and the AP exam.

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Term

Human Capital Investment

Definition

Government spending on education and training that increases worker productivity and labor quality.

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Human Capital Investment
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Government spending on education and training that increases worker productivity and labor quality.

POL-4.APOL-4.A.1
Infrastructure Investment
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Government spending on transportation, utilities, and communication systems that improves productive efficiency.

POL-4.APOL-4.A.2
Labor Force Participation Policies
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Government actions that increase the number of people working or seeking work, raising output.

POL-4.APOL-4.A.1
Supply-Side Fiscal Policies
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Tax and spending policies designed to increase incentives to work, save, invest, and produce.

POL-4.APOL-4.A.3
Supply-Side Economics vs. Demand-Side Economics
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Supply-side targets SRAS and LRAS; demand-side targets aggregate demand to change output and prices.

POL-4.APOL-4.A.3
Saving, Loanable Funds, and Investment Under Supply-Side Policy
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Lower taxes can raise saving, increase loanable funds, lower real interest rates, and boost investment.

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Investment Tax Credit
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A tax reduction for firms that purchase new capital, encouraging business investment.

POL-4.APOL-4.A.3
Technology, Research and Development, and Innovation Policy
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Government support for research, technology, and patents increases productivity and long-run growth.

POL-4.APOL-4.A.2
Business Tax Cuts and Deregulation
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Policies that lower business taxes and rules reduce costs and increase production incentives.

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Effects of Supply-Side Fiscal Policy
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These policies shift SRAS and LRAS right, raising output and expanding potential GDP.

POL-4.APOL-4.A.3