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Principles of Economics- Mankiw (5th) 523

Principles of Economics- Mankiw (5th) 523 - CHAPTER 24...

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CHAPTER 24 PRODUCTION AND GROWTH 541 world’s advanced countries, such as the United States, and uses these resources to make loans to less developed countries so that they can invest in roads, sewer sys- tems, schools, and other types of capital. It also offers the countries advice about how the funds might best be used. The World Bank, together with its sister orga- nization, the International Monetary Fund, was set up after World War II. One les- son from the war was that economic distress often leads to political turmoil, international tensions, and military conflict. Thus, every country has an interest in promoting economic prosperity around the world. The World Bank and the Inter- national Monetary Fund are aimed at achieving that common goal. EDUCATION Education—investment in human capital—is at least as important as investment in physical capital for a country’s long-run economic success. In the United States, each year of schooling raises a person’s wage on average by about 10 percent. In
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