Economic Growth

Capital Deepening is the process of?

• increasing consumer spending

• selling off obsolete equipment

• decreasing the amount of capital per worker.

• increasing the amount of capital per worker.

How is high GDP per capita linked to quality of life?

• High GDP per capita makes everyone richer.

• High GDP per capita means inflation is low and the cost of goods is lower.

• High GDP per capita usually indicates better nutrition, housing, education, and job opportunities.

• High GDP per capita does not affect quality of life because money can’t buy happiness.

Why does capital deepening work with human capital?

• Capital deepening means there is more money to hire workers

• Capital deepening increases people’s savings rate

• Greater skill increases workers’ output.

• Human capital increases GDP

How is saving linked to increased capital?

• Low savings means there is more money put toward capital formation.

• When money is saved, it is left in the bank and not available for capital formation

• Saving provides money for investment in human and physical capital.

• When savings rise, the GDP drops, making capital formation more difficult.

What are the main factors in technological progress?

• open markets, strong patent laws, and minimal regulation

• scientific research, innovation, scale of the market, education and experience, and natural resource use

• consumers buying electronic gadgets

• low taxes, fewer regulations, and higher investment

What is the ultimate effect of capital deepening?

• Increased wages from demand for workers

• Increased Demand for machines

• Increased factors of production

• Stable GDP per capita

Income that us not used for consumption is called ______

What happens to your money in the bank?

• Stays in the bank

• Bank loans it out

• Bank Invests it

• Bank owner uses it as is own money

The goal of every economy is to increase GDP __% every year?

More people in an economy will normally result in

• Lower GDP per Capita

• Lower capital

• Capital Increase

• More land per person