ECON 1001 Chapter Notes - Chapter 7: Human Capital, High Standard Manufacturing Company, Foreign Direct Investment
6 Sep 2018
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Document Summary
Economic growth around the world: growth rate measures how rapidly real gdp per person grew in a typical year. Physical capital per worker: workers are more productive if they have tools with which to work. Physical capital: the stock of equipment and structures that are used to produce goods and services. Human capital: the knowledge and skills that workers acquire through education, training, and experience. Includes the skills accumulated in early childhood programs, grade school, high school, college or university, and on-the-job training for adults in the labour force. An example is a patent on pharmaceutical company. When the patent expires, other companies are allowed to make the drug. Diminishing returns: the property whereby the benefit from an extra unit of an input declines as the quantity of the input increases. In the long run, the higher saving rate leads to a higher level of productivity and income, but not to higher growth in these variables.
