ECON 1BB3 Chapter Notes - Chapter 7: Human Capital, Diminishing Returns

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

This is just a summary of chapter 7: need to take detail notes for exam. See how economic growth differs around the world. Think about why productivity is the key determinant of a country"s standard of living. See how a country"s policies influence productivity growth. Economic prosperity: measure by gdp per person, varies substantially around the world. The average income in the world"s richest countries is more than ten times that in the world"s poorest countries. Growth rates of real gdp also vary sustainably. Relative positions of countries can change dramatically over time. Productivity: depends on amounts of physical capital, human capital, natural resource, and technological knowledge available to workers. Standard living in economy depends on the economy"s ability to produce goods and services. Government policies: influence economy"s growth rate in many ways. Diminishing returns: the more capital an economy has, the less additional output economy gets from extra unit of capital.