ECON 2006--Chapter 11, Economic Growth and Wealth of Nations
ECON 2006--Chapter 11, Economic Growth and Wealth of Nations ECON 2006
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This 1 page Class Notes was uploaded by Shannon Cummins on Friday October 7, 2016. The Class Notes belongs to ECON 2006 at Virginia Polytechnic Institute and State University taught by Staff in Fall 2016. Since its upload, it has received 3 views. For similar materials see Principles of Economics in Macroeconomics at Virginia Polytechnic Institute and State University.
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Date Created: 10/07/16
inflatio Economic Growth and the Wealth of Nations— 10.3.2016 populati Economic growth – the percentage change in Real per capita GDP o Change in the average person’s income, adjusting for price changes. o Economic growth = % change nominal GDP - % change prices - % change population = % change per capita Real GDP. “Rule of 70:” 70 / interest rate % = number of years. o How long will it take for income to double? The sources of economic growth are: 1. Resources 2. Technology 3. Institutions 1. Resources – Natural resources – physical land: coal, oil, diamonds, lumber, geography (seaside v. mountains) Physical capital – tools and equipment used in the production of goods and services: factories, roads, computers Human capital (labor) – skills, knowledge, and quantity of people 2. Technology – the knowledge that is available for use in production “produce more for less” 3. Institutions – important practice, relationship, or organization in a society (government) Political stability and rule of law Private property rights Stable money and prices Competitive markets Efficient taxes Specialization and trade Flow of funds across borders
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