Factors of Economic Growth

What does Gross Domestic Product

mean?

• The total value of all goods and services a country imports.

• The total value of all goods and services a country exports.

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

• The net loss in profits within a country due to imports.

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

• lower

• greater

• smaller

• answers 1 and 3 are correct

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

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

• good international relations, a democratic president, strict laws, freedom of press

• a powerful military, strong dictatorial leadership, communist regime, little personal freedom

• a monarchy, the World Bank, a parliamentary democracy, personal freedom

What are natural resources?

• resources that are gone from nature

• resources that are manufactured for the environment

• resources that are considered worthless

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

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

• 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. Therefore, a country with a lot of natural resources usually has a greater GDP than a country with little natural resources.

• countries with a lot of natural resources are usually taken over by other countries and don't have to worry about paying for anything

• they cannot become communist

• there is no advantage since most natural resources are worthless

What does human capital mean?

• the place where the most people live within a country

• the place where the most work is performed within a country

• the people who perform labor (work)

• the building where most people work in a country or state

Why should countries invest in developing human capital?

• because the more people you have working in one area like a capital the more productive it will be

• it leads to a lower GDP

• it leads to lower literacy rate

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

What are capital goods?

• goods that are produced in the capital

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

• goods that are produced without natural resources

• goods that are produced by the government

Why should countries invest in developing capital goods?

• they shouldn't, it is too expensive

• because capital goods cannot be sold to other countries

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

• because capital goods are less expensive than private goods

What do entrepreneurs do?

• represent business at the capital

• make all the laws in regards to business

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

• work in politics with regards to foreign business