ECON 1BB3 Lecture : What do the terms 'saving' and 'investment mean to an economist?

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Highest gdp country bounces between liechtenstein and qatar. Productivity: the quantity of goods and services that a worker can produce for each hour of work. Production function: shows how we combine inputs to produce output. Y = a x f (k, l, h, n) If a production function exhibits constant returns to scale, then doubling all inputs leads to a doubling of output. resources. 2y = a x f(2k, 2l, 2h, 2n) 100y = a x f(100k, 100l, 100h, 100n) xy = a x f(xk, xl, xh, xn) Marginal product: the extra output produced by increasing an input by 1 unit. Diminishing marginal product: the extra output produced by adding the 19th unit of labor is smaller than the xtra output produced by adding the 18th unit of labor. Catch-up effect: poor countries tend to grow faster than rich countries.