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Canada (158,212)
Economics (923)
ECN 204 (281)
Chapter 7

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Ryerson University
ECN 204
Christos Shiamptanis

Chapter 7 Production and Growth Economic Growth Around the WorldBc of differences in growth rates ranking of countries by income changes substantial over timeWorlds richest countries have no guarantee they will stay the richest and that the worlds poorest countries are not doomed forever to remain in poverty Productivity Its Role and Determinants Why Productivity is So ImportantProductivity the quantity of goods and services that a worker can produce for each hour of workA nation can enjoy a high standard of living only if it can produce a large quantity of goods and services How Productivity Is Determined Physical Capital per WorkerPhysical capital just capital the stock of equipment and structures that are used to produce goods and servicesEg A worker with only basic hand tools can make less furniture each week than a worker with sophisticated and specialized woodworking equipmentFactors of production inputs used to produce goods and servicesCapital is a factor of production used to produce all kinds of goods and services including more capital Human Capital per WorkerHuman Capital knowledge and skills that workers acquire though education training and experience o Eg Skills accumulated in early childhood programs high school university and on the job trainingSimilar to physical capital o Both raise a nations ability to produce goods and services o Both a produced factor of productionEg Students can be viewed as workers who have the important job of producing human capital eg Librarians and teachers that will be used in future production
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