<p> ECONOMIC GROWTH</p><p>Why is economic growth important?  Results in rising wages and higher standards of living for citizens (measured as increases in real gross domestic product (GDP) per capita). Economic growth allows a society to increase its consumption of goods and services.</p><p>Describe the difference between economic expansion and long-run economic growth.  Economic expansion – increasing the pace of economic activity to move an economy back toward its potential. (i.e. economy recovers from an economic downturn)  Long Run Economic Growth is an increase in an economy’s productive capacity.</p><p>Describe the difference between growth that occurs as a result of an increase in inputs and growth that occurs as a result of an increase in output per input.  Acquisition of more resources/inputs, more goods and services can be produced.  Existing resources/inputs are used more efficiency, which increases output per input, or productivity.</p><p>What indicators and models can we use to evaluate economic growth and the standard of living in different countries?  Indicators – Real GDP per capita, Output Gap, Total Productivity, Capacity Utiliziation  Long Run Aggregate Supply, Production Possibility Frontier</p><p>Compare the Characteristics of a More Economically Developed Country and Less Developed Country. MDC LDC  High Standard of Living  Low Standards of Living  Strong high-technology diversified economy  High Income Inequality  High per capita GDP  Poor Health Care  Industrialized  Inadequate Education  Some combination of Representative Government  Limited Life Expectancy  Free Market Economic Model  Low levels of Productivity  General lack of corruption  High Population Growth Rates (Dependency  Source of Wealth: Imperialism, Colonialism, Burdens) Globalization, Productivity  Unemployment, Underemployment  Examples (Japan, Canada, US, Australia, New  Small Industrial Sector, Outdated Technology Zealand, Europe, South Africa and Israel.  Migration from Rural to Urban  Lack of financial markets  Colonial Past  Limited Technology, Infrastructure, and Social/Political Institutions  Examples (South America, Africa, Middle East, and Southeast Asia) With most countries not being fully developed, and considered an LDC, what aspects allow for a higher level of development (i.e. China and Haiti)?  Resource Endowment  Geography, Climate  Language and Religion  Extent of Education  Size of Private Sector  Role of Government  Culture</p><p>RICH NATION/POOR NATION</p><p>You are secret agents assigned to find out if a country is rich or poor. From the information provided below, identify each of the five countries listed. Jot down the country’s name opposite each bold-face heading. Rank the five countries you have identified in order, with the richest country placed “1” and the poorest country at “5.”</p><p>Country A:__Argentina______Rank:_3__ Country B:____Japan______Rank: __2_</p><p>Size: Three-tenths the size of the United States Size: About the size of California</p><p>Population: 40,301,927 Population: 127,433,494</p><p>Natural Resources: Rich resources with fertile land and Natural Resources: Fish, no mineral resources minerals such as lead, zinc, tin, copper, iron ore, oil, and uranium.</p><p>Country C:__Nigeria______Rank:_5__ Country D:___Russia______Rank:__4_</p><p>Size: Twice the size of California Size: 1.8 times the size of the United States</p><p>Population: Large population of 135,031,164 Population: 141,377,752</p><p>Natural Resources: Vast resources including oil, tin, iron ore, Natural Resources: Vast resources with major deposits of oil, coal, limestone, lead, zinc and natural gas. natural gas, coal, many strategic minerals, vast timber supplies.</p><p>Country E:___Singapore______Rank:_1__</p><p>Size: 3.5 times larger than Washington D.C.</p><p>Population: 4,553,009</p><p>Natural Resources: Fish, deepwater port What are the factors contributing to Long-Term Economic Growth? 1. High Investment in Human and Physical Capital  Higher productivity i. Capital per worker – better tools to work with and infrastructure ii. Human capital per worker – Collective experience and education iii. Natural Resource per worker – Minerals, Energy, Rivers, Trees, and Fisheries iv. Technology – the way resources are combined to produce  Foreign Direct Investment – capital investment owned and operated by a foreign entity  Foreign Portfolio Investment – capital investment is financed with foreign money, but operate by domestic residents 2. Economic Freedom  Lower Taxes and Decrease Government Regulation  Sound Monetary Policy and Financial System  Property Rights  Decentralized Decision Making  Economic Enterprise 3. Strong incentives to save, invest, and increase productivity 4. Property Rights – strong property rights ensure that private investment and innovation are properly rewarded, which provides the incentive for future productive economic activity 5. Competitive Markets – competitive markets and flexible prices ensure that markets can adjust, and free trade opens industries to additional competition, which leads to increases in efficiency and productivity. 6. Efficient Financial Institutions – transform the deposits of savers into loans for borrowers, which are used to invest in capital, technology, and infrastructure – all key ingredients for growth. Research finds that countries with well-developed financial markets allocate resources more effectively, a key to economic growth. 7. Other Factors – Low inflation, political stability, free trade, health/nutrition, research/development, population growth. Goal:</p><p>Focus on attainment:</p><p>Short term changes:</p><p>How will these changes lead to success in reaching goal? ECONOMIC GROWTH</p><p>Why is economic growth important?</p><p>Describe the difference between economic expansion and long-run economic growth.</p><p>Describe the difference between growth that occurs as a result of an increase in inputs and growth that occurs as a result of an increase in output per input.</p><p>What indicators and models can we use to evaluate economic growth and the standard of living in different countries?</p><p>Compare the Characteristics of a More Economically Developed Country and Less Developed Country. MDC LDC</p><p>With most countries not being fully developed, and considered an LDC, what aspects allow for a higher level of development (i.e. China and Haiti)? RICH NATION/POOR NATION</p><p>You are secret agents assigned to find out if a country is rich or poor. From the information provided below, identify each of the five countries listed. Jot down the country’s name opposite each bold-face heading. Rank the five countries you have identified in order, with the richest country placed “1” and the poorest country at “5.”</p><p>Country A:______Rank:____ Country B:______Rank: ____</p><p>Size: Three-tenths the size of the United States Size: About the size of California</p><p>Population: 40,301,927 Population: 127,433,494</p><p>Natural Resources: Rich resources with fertile land and Natural Resources: Fish, no mineral resources minerals such as lead, zinc, tin, copper, iron ore, oil, and uranium.</p><p>Country C:______Rank:____ Country D:______Rank:____</p><p>Size: Twice the size of California Size: 1.8 times the size of the United States</p><p>Population: Large population of 135,031,164 Population: 141,377,752</p><p>Natural Resources: Vast resources including oil, tin, iron ore, Natural Resources: Vast resources with major deposits of oil, coal, limestone, lead, zinc and natural gas. natural gas, coal, many strategic minerals, vast timber supplies.</p><p>Country E:______Rank:____</p><p>Size: 3.5 times larger than Washington D.C.</p><p>Population: 4,553,009</p><p>Natural Resources: Fish, deepwater port</p><p>What are the factors contributing to Long-Term Economic Growth? Goal:</p><p>Focus on attainment:</p><p>Short term changes:</p><p>How will these changes lead to success in reaching goal?</p>