Lesson 3: Stimulating Economic Growth

Stimulating Economic Growth

March 4, 2025

Warm Up

"Imagine you have just been elected as the
leader of a country with a struggling
economy. Your people are facing high
unemployment, low wages, and rising prices.
You have the power to introduce one major
policy to boost economic growth. What
would you do first? Why?"

1.

Think individually for one minute about a
policy or action you would take.

2.

Pair up with a classmate and discuss
your ideas.

3.

Share your strategies as a class.

Lesson
Objectives &
Main Idea

Main Idea

Economic growth, essential for higher living
standards and societal advancement, can be
stimulated through various strategies including
fiscal policy, monetary policy, supply-side
policies, trade policies, and fostering
innovation.

●I will be able to explain

how economists
measure growth and
analyze the causes of
economic growth

●I will be able to discuss

how productivity and
economic growth are
related

Measuring Economic Growth

Real GDP

Primary measure that accounts for

inflation and shows actual economic

output changes over time

Per Capita

Adjusts economic growth for population

size, giving more accurate picture of

individual prosperity

Natural
Resources &
Economic
Growth

●Abundant land resources enable
agricultural and industrial
development

●Forest resources provide raw
materials and support biodiversity

●Oil reserves generate significant
revenue and energy security

●Water resources sustain agriculture
and industrial processes

●Sustainable resource management
ensures long-term economic benefits

●Resource-rich nations must diversify
for stable growth

Open Ended

Highlight Two important natural resources that can foster economic growth.

Human Resources & Capital

Human Resources

●Skilled and educated labor force
drives growth

●Continuous workforce development
and training essential

●Quality of human capital affects
productivity

Capital Resources

●Financial investments fuel business
expansion

●Modern machinery enhances
production efficiency

●Infrastructure development
supports economic activities

Open Ended

Explain the importance of human capital in economic growth.

Technology & Innovation

Driving Economic Growth Through
Technological Advancement

Technology and innovation serve as critical catalysts for economic

growth in modern economies. From the industrial revolution's steam

engines to today's artificial intelligence, technological advances have

consistently transformed production methods and boosted

efficiency. Innovations like electricity and automobiles have

revolutionized industries, creating new markets and employment

opportunities while significantly improving productivity. In today's

digital age, technological advancement continues to reshape

business models and drive economic development through

automation, connectivity, and enhanced production capabilities.

Understanding Productivity

●Output produced from a given set of inputs

●Compare inputs to outputs for
measurement

●Multifactor Productivity ratio analyzes
industry efficiency

Definition and Measurement

●Quality of labor and workforce skills

●Technological innovation and advancement
capabilities

●Energy costs and financial market conditions

Key Contributing Factors

Productivity & Economic Growth Connection

Productivity's

Impact on Growth

Success Stories

Open Ended

Explain the relationship between productivity and economic growth.

Review & Assessment

Real GDP per capita

The most accurate

measure of economic

growth adjusted for

population

4 Growth Factors

Natural resources,

human resources,

capital, and technology

Productivity
Measurement

Output produced

relative to inputs used in

production