ECON 103 Lecture Notes - Lecture 8: High Standard Manufacturing Company, Human Capital, Foreign Portfolio Investment
6 Nov 2016
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Document Summary
Productivity: the quantity of goods and services produced from each unit of labor input. Nation can enjoy high standard of living if it produces large amount of goods & services. Same for opposite (low standard of living = low productivity) Physical capital per worker: physical capital: the stock of equipment and structures that are used to produce goods and services. Human capital per worker: human capital: the knowledge and skills that workers acquire through education, training, and experience. One way to raise future productivity is to invest more current resources in the production of capital. 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.
