Principal of Economics

 

This paper will create a table that lists at least four sources of growth in the economy along with two examples of each source

 

Sources Of Growth In The Economy

Examples

Explanation

Physical Capital/ Natural Resources i.  Diamonds

ii. Oil

  • This is important to countries and without them countries will need to import the resources hence costly
  • Countries with a lot of natural resources can trade them with other countries to make more money for their economy
Human Capital i. Training

ii. Education

  • This is the value that humans bring to the market place
  • For example, a country’s literacy rate will impact human capital depending on the percentage who are able to read/write, skilled/non-skilled labor
  • Countries that invest in health, education will have a more valuable workforce with more production of goods and services
  • People with education are likely to contribute to technological advances
Natural Capital i. Factories

ii. Tools/Machinery

  • To increase its GDP, a country will have to invest in capital goods
  • The more capital goods a country has, the more goods they are able to produce and hence more money they can make
Entrepreneurship i.  Technology

ii. Organize the three sources for creation of jobs

  • Involves people who take risks to start and operate a business
  • The people organize their business well for it to be successful
  • They bring together the above natural, human and capital resources for the business
  • Create jobs & lessens unemployment
  • The more entrepreneurs a country has the higher the GDP of such a country