ECON 306 Lecture Notes - Lecture 6: Real Interest Rate, Net Present Value, Capital Market
24 May 2017
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What we have done so far: assuming identical skills. Now we"re going to look at differences in worker skills: from education (presumably increases skills) and training (training by the employer) Investment skills: on-job training by the employer, then by the government. The costs are incurred because the expectation of future benefits exceed costs. Direct costs such as books and tuition. Transfer costs: the resources we put in education could be put somewhere else (health, infrastructure, etc : for resources that cannot be transferred, the opp cost is 0. Note: the redistribution of costs may increase society"s utility because of preferences for type on income distribution (hard to measure hard to put a $ value on it) The multiplier effect: in government spending, increased spending generate employment and increase hiring and the resulting economic activity generated is more than the initial government spending.
