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Unit 2.2– Macroeconomics

2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-2

#$an"e Recor%

2014-I-01 Initia& #reation

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2.2.4 Economic Gro't$

2.2.4.1 ($e Rise in Rea& GD!)ca*ita2.2.4.2 W$+ are some Nations Ric$, ot$ers not

2.2.4.3 Determinants o / era"e a o r!ro% cti it+2.2.4.4 # rrent it ation2.2.4.5 !romotin" Economic Gro't$2.2.4.6 imits to Gro't$

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Risin" i in" tan%ar%s

/ contin in" increase in a era"e &a o r *ro% cti it+ is e+ to risin" &i in" stan%ar%s

!ro% cti it+ %e*en%s on7E8 i*ment a ai&a &e to 'or ers 9:i;e% #a*ita&<

i&&s 'or ers rin" to t$eir =o s 9> man#a*ita&<(rans*ortation an% comm nicationsin rastr ct re 9! &ic #a*ita&<

e"a& an% socia& en ironment 9 ocia& #a*ita&

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2.2.4.1 Gro't$ Rates an% !ro% cti it+

>o' &on"-r n "ro't$ can re o& tioni?e&i in" stan%ar%s@

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Rea& GD! *er !erson in e&ecte% #o ntries 1A 0-2000 9in1CC5 U. . Do&&ars<

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2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-

Rea& GD! *er !erson in :i e In% stria&i?e%#o ntries 1A 0-1CCA

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2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-A

($e BIG ne's o t$e 21st #ent r+ – t$erise o #$ina an% In%ia @

#$ina s GD! $as "ro'n + A – 10ann a&&+ since t$e ear&+ 1CA0s

1CA0 *er ca*ita GD! F 0A 2003 *er ca*ita GD! F 4 304#$ina s "ro't$ s$o's &itt&e si"n o s&o'in"

1CC5 -2003 *er ca*ita GD! in #$ina "re' +.55

In recent +ears In%ia $as "ro'n at asimi&ar&+ $i"$ rate

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2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-C

#$ina H In%ia – Rea& GD! !er #a*ita – 1C 5-2003

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ma&& Di erences /%% * - E ent a&&

ma&& %i erences in ann a& "ro't$ ratescan $a e &ar"e &on"-r n e ects

ear a ter +ear com*o n% "ro't$#om*o n% interest is

($e *a+ment o interest not on&+ on t$e ori"ina&

%e*osit t on a&& *re io s&+ acc m &ate%interest

#om*o n% "ro't$ 'or s t$e same 'a+

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($e ro&e o / era"e a o r !ro% cti it+


Rea& GD! 9 < *er *erson is t$e *ro% ct oa era"e o t* t o t$ose em*&o+e%

*ercenta"e o t$ose em*&o+e% in t$e *o* &ation. et F tota& rea& o t* t N F n m er o em*&o+e% 'or ers! ! F tota& *o* &ation($en

GD!*c F )! !GD!'r F )N

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Rea& GD! !er !erson an% Gro't$

Rea& GD! *er *erson can "ro' on&+ to t$ee;tent t$at "ro't$ occ rs in

Wor er *ro% cti it+ 9 t* t *er $o r 'or e%</ era"e 'or in" $o rs *er 'or er ($e raction o t$e *o* &ation em*&o+e%

In t$e &on" r n($e im*ortant actor $as een increases ina era"e &a o r *ro% cti it+

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Rea& GD! *er !erson an% / era"e a o r!ro% cti it+ in #ana%a 1C60-2003

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!ercenta"e o t$e #ana%ian !o* &ationin !ai% Em*&o+ment 1C60-2003

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More #ons m*tion or more eis re

>i"$er a o r !ro% cti it+ means7more o t* t co &% e *ro% ce% 'it$ t$e same amo nto &a o r R t$e same o t* t co &% e *ro% ce% 'it$ &ess &a o r

/mon" ric$ co ntries t$ere is a %i er"ence intren%s

U / increasin"&+ 'or H cons m*tion oriente%E ro*e - &ess 'or in" time

acations $o&i%a+s H ear&ier retirement

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/nn a& N m er o >o rs Wor e% *er !erson 15-64

/nn a& N m er o >o rs Wor e% *er !erson/"e% 15-64

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2.2.4 .3 Determinants o / era"e a o r!ro% cti it+

2.2.4.1 > man ca*ita&2.2.4.2 !$+sica& ca*ita&

2.2.4.3 an% an% nat ra& reso rces2.2.4.4 (ec$no&o"+2.2.4.5 ea%ers$i*2.2.4.6 e"a& an% *o&itica& en ironment

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2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-1A

> man #a*ita&imi&ar to *$+sica& ca*ita& in t$at it is ac8 ire% t$ro "$ t$e in estment o

time an%)or mone+#osts o > man #a*ita&

**ort nit+ cost o st %ent time F ore"one 'a"es

E.". - "oin" to sc$oo& to &earn ne' s i&&s(eac$er sa&aries an% sc$oo& in rastr ct re

Greater $ man ca*ita& res &ts in $i"$er *otentia& *ro% cti it+B t s&o' "ro't$ o macro econom+ can mean &a o r orce is

nem*&o+e% or n%erem*&o+e% – i so t$en/ct a& o t* t K *otentia& o t* t> man ca*ita& %e*reciates i not se% – s i&&s can ecome Lr st+i 'or ers are nem*&o+e% or &on"

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2014-I-01 Dr. J.M. Bennett !.En". !M! ENGR 3360U En" Eco2.2-1C

!$+sica& #a*ita&!$+sica& ca*ita&7 (oo&s *eo*&e $a e to 'or 'it$ 9e.". mac$ines

actories<on" term tren% is to s stit te mac$ine &a or or $ man &a or – 'it$

more an% etter *$+sica& ca*ita& 'or ers *ro% ce more

Diminis$in" ret rns to ca*ita&I tec$no&o"+ an% ot$er in* ts are $e&% constant an a%%itiona& nito ca*ita& t+*ica&&+ %oes not a%% as m c$ to *ro% ction as t$e irst

e' nitsIncreasin" t$e amo nt o ca*ita&

Wi&& ten% to increase t$e *ro% cti it+ o t$e 'or orceEac$ 'or er $as LMore too&s to 'or 'it$

B t – t$e !ro% cti it+ ene its to a%%in" more ca*ita& %ec&ine as moreca*ita& is a%%e%. Diminis$in" ret rns to a%%itiona& ca*ita&

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/ era"e a o r !ro% cti it+ an% #a*ita&

*er Wor er in 15 #o ntries 1CC0

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t$er Reso rcesan% ener"+ an% ra' materia&s

:erti&e &an%>istorica&&+ &an% erti&it+ 'as t$e e+ iss e '$en societ+ 'as

*rimari&+ a"ric &t ra&B t a"ric &t re is no' &ess t$an 3 o &a o r orce

Reso rce RentsF t$e s r*& s o reso rce re en es o er t$e cost o e;tractionReso rce rents can *ro i%e n%s or in estment in *$+sica& or $ manca*ita& – or can e 'aste%

E.". /& erta Nor'a+ Ni"eria H Ira8 $a e a&& recei e% s stantia&re en es rom oi& *ro% ction

B t Ni"eria an% Ira8 are 'orse o no' t$an in 1CA0ocia& H !o&itica& actors %etermine i societ+ as '$o&e ene its

U i 2 2 M i

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(ec$no&o"+/ i&it+ to %e e&o* an% a**&+ ne' more *ro% cti e tec$no&o"ies 'i&&increase *ro% cti it+

E;am*&es7team en"ine 9since &ate 1 00s<

Interna& com stion en"ine 9since &ate 1A00s<#om* ters 9since a**ro;imate&+ 1C60<

Ne' tec$no&o"ies im*ro e *ro% cti it+ t$ro "$o t econom+ - not = st'$ere intro% ce%

in"&e most im*ortant so rce o *ro% cti it+ im*ro ement

U i 2 2 M i

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Entre*rene rs$i*Be$a io r t$at res &ts in ne' *ro% cts ser ices tec$no&o"ica&

*rocesses or or"ani?ationa& inno ations. E;am*&es7>enr+ :or% s mass *ro% ctionJa*an - = st-in-time in entor+ s+stem

Entre*rene rs$i* can occ r in t$e:or-*ro it sector

Not- or-*ro it sector Go ernment sector

B t cam artists an% ra %sters can a&so e er+ inno ati e so..

U i 2 2 M i

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imits to Gro't$#an economic "ro't$ contin e in%e inite&+ "i en t$at 'e $a e a inite 'or&%o nat ra& reso rces

Note7 increases in GD! %o not necessari&+ mean increase% %eman% orreso rces

E;am*&es7

er ices 9e.". massa"e t$era*+< are *art o GD! t ma+ not semateria& reso rces – an% ma+ increase o er time(ec$nica& c$an"e ma+ re% ce en ironmenta& im*act

com*are t$e reso rces se% in storin" m sic on !s or anI!o% @@

ome *ro &ems create% + economic "ro't$ are a *artic &ar c$a&&en"e orc rrent instit tions7

G&o a& 'armin" is c&assic e;am*&e – eca se eac$ nation 'o &% &i eot$ers to ear t$e cost

U it 2 2 M i

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2014 I 01 D J M B tt ! E " !M! ENGR 3360U E " E2 2 25

Does Gro't$ $e&* or $ rt t$e En ironment

Greater 'ea&t$ e;*an%s societ+ s ca*acit+ to *rotect t$e en ironmentWorst en ironmenta& *ro &ems are o n% in er+ *oor nations –too *oor to La or% reme%ies

ome ric$ nations 9e.". E ro*e< $a e ma%e ma=or e orts to re% ceen ironmenta& &oa% BU(

It s a *o&itica& c$oice – e.". U / O #ana%a resist P+oto!essimistic ie' o economic "ro't$ o ten i"nores mar et res*onses

>i"$er *rices re% ce 8 antit+ %eman%e% an% *eo*&e ten% to see

o t s stit tes

Documents

3360 Unit 02.2.4 2014-I-01