Principles of Economics- Mankiw (5th) 517

Principles of Economics- Mankiw (5th) 517 - CHAPTER 24...

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CHAPTER 24 PRODUCTION AND GROWTH 535 simply because they happen to be on top of some of the largest pools of oil in the world. Although natural resources can be important, they are not necessary for an economy to be highly productive in producing goods and services. Japan, for instance, is one of the richest countries in the world, despite having few natural resources. International trade makes Japan’s success possible. Japan imports many of the natural resources it needs, such as oil, and exports its manufactured goods to economies rich in natural resources. Technological Knowledge A fourth determinant of productivity is tech- nological knowledge —the understanding of the best ways to produce goods and services. A hundred years ago, most Americans worked on farms, because farm technology required a high input of labor in order to feed the entire population. Today, thanks to advances in the technology of farming, a small fraction of the population can produce enough food to feed the entire country. This technological
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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