ECN 204 Chapter 7: Chapter 7.docx

• School: Ryerson University
• Department: Economics
• Course: ECN 204
• Professor: Christos Shiamptanis

Document Summary

B/c of differences in growth rates, ranking of countries by income changes substantial over time. World"s richest countries have no guarantee they will stay the richest and that the world"s poorest countries are not doomed forever to remain in poverty. Productivity: the quantity of goods and services that a worker can produce for each hour of work. A nation can enjoy a high standard of living only if it can produce a large quantity of goods and services. Physical capital (just capital): the stock of equipment and structures that are used to produce goods and services. A worker with only basic hand tools can make less furniture each week than a worker with sophisticated and specialized woodworking equipment. Factors of production: inputs used to produce goods and services. Capital is a factor of production used to produce all kinds of goods and services, including more capital. Human capital: knowledge and skills that workers acquire though education, training, and experience: eg.