ECON 1100 Chapter Notes - Chapter 14: Human Capital, Production Function, Millennium Development Goals
7 Dec 2013
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Chapter 14: economic growth, productivity, and living standards. Power of compound growth: the fact that seemingly small differences in growth rates, maintained over long periods, will produce large differences in magnitude. Compound interest: the payment of interest not only on the original deposit but also on all previously accumulated interest. Rule of 72: a rule of thumb stating that to find the number of years it takes a magnitude to double when it is growing at a constant rate, divide 72 by the growth rate. Real gdp per person= average labour productivity x share of population employed (y/pop)= (y/n) x (n/pop") Diminishing returns to capital: if the amount of labour and other inputs employed is held constant, then the greater the amount of capital already in use, the less an additional unit of capital will tend to add to production. Dutch disease: the tendency in an economy with a booming natural resource sector for the manufacturing sector to decline.
