ECON 2010 Study Guide - Midterm Guide: Physical Capital, Real Interest Rate, Human Capital
Document Summary
Chapter 7: feature of compound interest rate in gdp growth. Gdpt (1+x )n=gdpt +n a: rule of 72: gdpt (1+x )n=gdpt +n=2gdpt then ,n=72/x, gdp per person (a. k. a. =output per worker (a. k. a. labor productivity) (y/n) * Proportion of people employed over population (n/pop)-not employment rate it"s the number of people employed over population: the factors that improve productivities (examples and differences). For examples: 6 general factors, ways to improve technological change and human capital, human capital. Physical capital, management, entrepreneurship, technology, government policy: definition and differences of human capital and physical capital. Definition and differences of entrepreneurs and managers: feature of diminishing marginal return of physical capital, how legal environment and policies improve gdp growth. For example: less consumption in current period, less leisure when gdp grows faster due to longer working hours, more pollution if not well managed, unequal distribution of wealth. Real gdp per person equals average labor productivity (y/n): times the share of population employed.
