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Chapter 12 Section 3

 

RESOURCES

Video Lesson

 

Section HW

Read pages 318-324 and complete questions 1-4 p. 324.  Study for Ch. 12 Test.

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Weekend Reading (HW)

Chapter 12 Weekend Reading

 

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Prentice Hall Section Website

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Self-Test

Chapter 12 Self-Test

 

National Standard(s) Covered

Content Standards: 15, 18

 

Stock Market Simulation

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Advanced Topic Presentation

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Final Exam Prep
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     The basic measure of a nation's economic growth rate is the percentage change of real GDP over a given period of time. A nation's population tends to grow. Real GDP must keep up with the population growth rate. The best measure of a nation's standard of living is real GDP per capita. That divides the nation's real GDP by the number of people it has (per capita means per person). Real GDP per capita lets economists compare economies for different time periods and different nations.

     Physical capital contributes to an economy's output and aids economic growth. Capital deepening, the process of increasing the amount of capital per worker, is an important source of growth in modern economies. Increases in human capital also lead to economic growth. Better educated workers can produce more output per hour of work.

     An economy increases its capital through saving and investment. Saving is income that consumers do not spend to purchase goods and services. Money that is saved, which may be held in a bank, is then available for investment. The savings rate is the proportion of disposable income spent to income saved. In the long run, a higher savings rate means more growth in real GDP.

     Besides capital deepening, the other key source of economic growth is technological progress. This is an increase in efficiency gained by producing more output without using more inputs.

 

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