Economic Growth Flashcards
1
Q
what are the 3 pillars of economic growth?
A
- rate of growth of capital
- rate of growth of technology
- rate of growth of human capital (quality of workforce)
2
Q
what is the biggest pillar?
A
technological change
3
Q
what is cost disease?
A
services such as education, healthcare, etc cannot be improved much in terms of labor productivity as they are handicraft activities, so they grow more expensive over time
4
Q
how can developing countries increase growth of potential GDP?
A
- foreign aid & investment
- multinational corporations
- improving education
- improving health
- improving government, political stability
