ECO 1102 Lecture Notes - Lecture 5: Invisible Hand, Foreign Portfolio Investment, Human Capital Flight

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rosetermite420

8 Nov 2017

School

University of Ottawa

Department

Economics

Course

ECO 1102

Professor

D R.M A O T A K O N G M O C H A R L E S O L I V I E R

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Productivity the (cid:395)ua(cid:374)tity of goods a(cid:374)d se(cid:396)(cid:448)i(cid:272)es p(cid:396)odu(cid:272)ed f(cid:396)o(cid:373) ea(cid:272)h hou(cid:396) of a (cid:449)o(cid:396)ke(cid:396)"s time. Productivity is the key determinant of living standards. Growth in productivity is the key determinant of growth in living standards. For a country to enjoy a high standard of living, it must produce a large quantity of goods and services. The importance of saving, investment, and stable financial markets. Because resources are scarce, devoting more resources to producing capital requires devoting fewer resources to producing goods and services for current consumption. Consequently, the accumulation of capital involves a tradeoff. A well-functioning and carefully regulated financial market, one that quickly and efficiently brings savings and investment together with minimal risk and in a transparent way, is a critical ingredient in the recipe for economic growth. Successful government policies that raise the saving rate mean that fewer resources are needed to make consumption goods and more resources are now available to make capital goods.

Related Questions

1) Which of the following things would increase the value of Total Factor Productivity (TFP)?

a. A new production method that can produce smaller, more efficient microchips.

b. None of the other answers.

c. A company hires a large amount of workers after building a brand new factory.

d. Foreign investors invest in physical capital.

2) The country of Rupertopia has one factory for all its workers in 2011 and 2012. There were 100 workers in 2011 and 150 workers in 2012. Additionally, there were 200 people living in Rupertopia in 2011 and 1,000 people in 2012. Real GDP was one million dollars in 2011 and two million dollars in 2012. Which of the following statements regarding labor productivity is true:

a. Labor productivity in Rupertopia exhibits constant returns.

b. Labor productivity in Rupertopia exhibits increasing returns.

c. Labor productivity in Rupertopia exhibits diminishing returns.

d. More information is needed to determine whether labor productivity in Rupertopia exhibits diminishing, constant, or increasing returns.

3) Which of the following changes would help to improve a country's productivity level?

a. Improvements in the health of workers

b. None of the other answers.

c. Tuition increases at local Universities

d. A lower birth rate

4) When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly. This statement:

a. is an assertion that capital is subject to increasing returns.

b. is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant.

c. represents an unconventional view of the production process.

d. All of the other answers are correct.

5) Economic growth can be influenced by government policies. Which of the following can influence the economy's growth rate?

a. All of the other answers are correct

b. Promoting research and development of technologies

c. Fostering education

d. Maintaining property rights

rosemanatee841

Capital can be differentiated between physical capital and human capital. Human capital is:

(i) the new development in machinery and software.

(ii) the knowledge and skills workers acquire from education and training or their life experiences.

(iii) the energy use to bring together the factors of production to produce goods and services.

(iv) the goods manufactured to produce other goods and services.

blushcamel925

This question is from the article below.

By Brandon Fuller.

A nation's GDP is determined by its labor force, its capital stock, and its technological knowledge. An increase in the amount of capital per worker increases a nation's GDP. An improvement in technology allows a nation to get more GDP out of its existing capital stock. Technology refers to the way an economy organizes its labor and capital to produce goods and services. If two nations have the same number of workers and capital but one nation uses better technology to get more out of its labor and capital, it will generate more GDP. The nation with better technology has higher productivity - it gets more output per hour of labor input.

A recent Hal Varian commentary in the New York Times focused on the role of technological knowledge in explaining the different productivity experiences of Europe and the United States. Compared to Europe, the United States experienced much stronger growth in output per labor hour over the past decade. Why? The evidence suggests that American firms integrate information technology more quickly than their European counterparts. Follow the link to findout more: Productivity.

redmouse420

ECO 1102 Lecture Notes - Lecture 5: Invisible Hand, Foreign Portfolio Investment, Human Capital Flight

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