ECON 1B03 Chapter Notes - Chapter 7-8: Poverty Trap, Litre, Human Capital

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ECON 1B03 Full Course Notes
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ECON 1B03 Full Course Notes
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What policies may help raise growth rates and long-run living standards? services (one of the 10 principles) A country"s standard of living depends on its ability to produce goods and. A country"s ability depends on its workers productivity each hour of a worker"s time. Productivity: the average quantity of goods and services produced from. When a nation"s workers are very productive, real gdp is large and incomes. When productivity grows rapidly, so do living standards. But what determines productivity and growth rates? are high. Physical capital (k): stock of equipment and structures used to produce goods and services. Productivity is higher when the average worker has more capital (machines, equipment, etc. ) Increasing k/l causes an increase in y/l (productivity, output per worker) Human capital (h): knowledge and skills workers acquire through education, training, and experience. Productivity is higher when the average worker has more human capital (education, skills, etc. ) Increasing h/l causes an increase in y/l (productivity, output per worker)

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