Principles of Macroeconomics – Economic Growth (Lecture 4.1)

Principles of Macroeconomics – Economic Growth (Lecture 4.1)

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Principles of Macroeconomics – Economic Growth (Lecture 4.1) These are necessary but not sufficient for economic growth. Property rights o Respect through the law to build up wealth. o Eg: In Africa there is a slow growth in GDP due to no protection of property rights meaning there can be arbitrary acts by the government involving property, whereas in Australia this would not happen due to property rights law. o Property rights also include capital. o Enables specialisation and investment. Markets o For incurring a comparative advantage with the benefit of specialization in a market over time through “learning-by-doing”. o Markets also work without money, but inefficient. Monetary exchange o Trades to make improvements in productivity. o Enables specialisation. Cause for economic growth The quantity of real GDP depends on three factors, all of which can be improved with quantity and quality: o Natural resources (N) o The quantity of labour (L) o The quantity of capital (K)
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This note was uploaded on 09/27/2011 for the course FINANCE 1001 taught by Professor Profassorted during the Three '11 term at University of Adelaide.

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Principles of Macroeconomics – Economic Growth (Lecture 4.1)

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