Economic Growth Factors - Year 9

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Gross Domestic Product

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The total value of all goods and services produced within a country in one year.

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The___________ a country’s GDP, the better the country’s standard of living.

Back

greater

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What are the 4 factors that lead to a country’s economic growth?

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investment in human capital, investment in physical capital, land (natural resources), entrepreneurship

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What are natural resources?

Back

materials or substances that occur in nature and can be used for economic gain.

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Why is it beneficial for a country to have an abundance of natural resources?

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Countries that have a lot of natural resources are able to use them to produce goods and services cheaper than a country that has to import them.

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Why should countries invest in developing human capital/labour?

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Investment in the education and skills training of people creates a smarter and more productive workforce, which relates to a higher GDP.

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Capital goods

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the factories, machinery, and technology used to produce goods and services

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Why should countries invest in developing capital goods?

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When countries invest in capital goods, they are providing better facilities, resources, and/or materials for the people who perform the labour which creates a more productive workforce leading to greater economic growth (higher GDP).

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What do entrepreneurs do?

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start their own business, invent something new, or change the way something was previously done so that it works better

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How does entrepreneurship influence economic growth?

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It creates jobs and reduces unemployment, encourages people to take risks and create better materials, products, and technologies, and the more entrepreneurs a country has, the higher the country's GDP.