hwakch25 - Econ 2 Principles of Economics Chapter 25...

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Econ 2: Principles of Economics Chapter 25 Questions for Review 2. The four determinants of productivity are: (1) physical capital, which is the stock of equipment and structures that are used to produce goods and services; (2) human capital, which consists of the knowledge and skills that workers acquire through education, training, and experience; (3) natural resources, which are inputs into production that are provided by nature; and (4) technological knowledge, which is society’s understanding of the best ways to produce goods and services. 7. The higher the rate of population growth, the lower is the level of GDP per person because there's less capital per person, hence lower productivity. Problems and Applications 2. a. More investment would lead to faster economic growth in the short run. b. The change would benefit many people in society who would have higher incomes as the result of faster economic growth. However, there might be a transition period in which workers and owners in consumption-good industries would get lower incomes, and
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