GDP, Human Capital, Physical Capital (Capital Goods), and Trade

Define GDP (Gross Domestic Product)

Investing in Human Capital and Physical Capital will increase GDP.

• True

• False

Why is it important for a country to invest in human capital?

• All humans need capital to survive

• Starting your own business is good for the economy

• Countries that invest in the education and training of their people usually have a higher GDP

• Countries that invest in new technology and machinery produce more and have a higher GDP

Which are examples of physical capital?

• Iron ore, silver, wood, diamonds.

• On the job training, public education.

• Technology, machinery, buildings, tools.

• Starting your own business or inventing something new.

Brazil sends university students abroad to study in other countries.

• Human Capital

• Capital Goods (Physical)

Russia invests in the expansion of its ports.

• Human Capital

• Capital Goods (Physical)

Canada is planning to build a city with Internet speeds 10 times faster than anywhere else in the world.

• Human Capital

• Capital Goods (Physical)

Germany upgrades its highways.

• Human Capital

• Capital Goods (Physical)

A company builds a new factory.

• Human Capital

• Capital Goods (Physical)

What is an exchange rate?

• The price of one nation's currency in terms of another's ($1 = $15 pesos)

• How many US dollars you can exchange for RMB at Travelex

• The price of goods in terms of a foreign currency