EC140 Chapter Notes - Chapter 7: Thomas Robert Malthus, Foreign Portfolio Investment, Physical Capital
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Productivity: the quantity of goods and services produced from each hour of a worker"s time. Physical capital - the stock of equipment and structures that are used to produce goods and services. Human capital - the knowledge and skills that workers acquire through education, training, and experience. Natural resources - the inputs into the production of goods and services that are produced by nature, such as land, rivers, and mineral deposits. Technological knowledge - society"s understanding of the best ways to produce goods and services. Diminishing returns - the benefit from an extra unit of an input declines as the quantity of the input increases. Catch-up effect - countries that start off poor tend to grow more rapidly than countries that start off rich. Foreign direct investment - establishing a direct business interest in a foreign country, such as buying or establishing a manufacturing business.