economic growth Flashcards
economic growth
an increase in the amount of goods and services produced per head of the population over a period of time.
Basically an increase of GDP per Capita
high standard of life
need high GDP
high GDP
get productivity (by investment)
Determinants of productivity
physical capital, human capital, natural resources, technological knowledge
physical capital
any machinery, equipment, building, or goods that aid in the production of goods and services
human capital
the knowledge and skill of a worker through education training and experience; (not labor → amount of workers available)
natural resources
gifts from nature aiding in production
-renewable → used recycled, more come
-non-renewable → once used its done
technological knowledge
society’s understanding of how to use technology
labor
amount of workers available
technology
Any machinery or equipment that helps produce goods and services faster better or cheaper
brain drain
get high education from a country and after getting degree leave to another country
diminishing marginal return
examples that smaller country goes further than bigger countries for the same increase in a unit of productivity
relationship between larger and smaller countries considering diminishing marginal return?
smaller countries go further than bigger countries from the same increases in a unit of productivity
foreign portfolio management
countries from abroad sending money to that country (not that invested bc they don’t own it, kinda like a contractor)
foreign direct investment
(much more powerful in growth of smaller countries) → company brings everything (workers, education, technology, etc) for that country but they own them
