Lecture #4 - Sept 21.docx

Nicole Wallenburg Mr. Parkin Economics 12-04-23 Economics – Lecture #4 Economic Growth The expansion of production possibilities—and increase in the standard of living—is called economic growth. Two key factors influence economic growth:  Technological change  Capital accumulation Technological change is the development of new goods and of better ways of producing goods and services. Capital accumulation is the growth of capital resources, which includes human capital. The Cost of Economic Growth To use resources in research and development and to produce new capital, we must decrease our production of consumption goods and services. So economic growth is not free. The opportunity cost of economic growth is less current consumption. Gains From Trade Comparative Advantage and Absolute Advanta