A list of definitions relating to classical macroeconomic theory.

What are the terms that are essential for understanding basic macroeconomics?

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... used to produce goods and services. The most common factors of production are capital (K) and labor (L).

Factor prices: the amounts paid to the factors of production.

Imports: Goods or services purchased from other countries.

Investment: Goods purchased by individuals or firms that add to their capital stock.
Government purchases: purchases made by the government.

Marginal product of capital: the extra ...