3 Production and Growth Flashcards

1
Q

Productivity

A

The quantity of goods and services produced from each unit of labour input

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the key determinant of GDP growth?

A

Productivity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Determinants of productivity

A

Physical capital
Human capital
Natural resources
Technological knowledge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What policy interventions can be made to increase productivity

A
  • tax incentives (e.g ISA’s) which encourage saving and therefore increasing capital investment
  • public education and subsidies to training in order to promote human capital
  • publicly operated research institutions and patent systems to encourage R&D
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the differing views on government and education

A

Mainstream view: centralised investments in R&D are useful as well as public schooling
Alternative view: no one can predict the next technological breakthrough so it is hard to know what education is important in the future. Therefore public education is a form of brainwashing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

FDI

A

Foreign direct investment. Capital investment owned and operated by a foreign entity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Foreign portfolio investment

A

Investment financed with foreign money but operated by domestic residents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What does a lack of property rights cause?

A
  • impedes the coordinating power of markets
  • discourages domestic saving
  • discourages investment from abroad
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does political instability cause?

A
  • A threat to property rights
  • revolutions and coups
  • residents have less incentive to save, invest, and start new businesses
  • foreigners have less incentive to invest
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How can increasing population help and hinder society?

A

+GDP increases as population increases
-productivity per worker decreases
-puts more pressure on natural resources
+could lead to better technological progress since more people are around to innovate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly