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ECO1413 CH8: Long Run Economic Performance - Coggle Diagram
ECO1413 CH8: Long Run Economic Performance
Productivity
Def: Productivity refers to the quantity of goods and services that a worker can produced for each hour of the working time.
Factors affecting Productivity
Physical capital
Human capital
Natural resources
Technological knowledge
Demand for Labour
Def: A concept that describes the amount of demand for labor that an economy or firm is willing to employ at a given time.
Factors affecting it: output price, technological change
Supply for Labour
Def: The supply of labor is the number of total hours that workers wish to work at a given real wage rate.
Factors affecting it: Changes in alternative opportunities, Immigration, population growth
Y = C + I + G + (x-m)
C = Consumption
I = Investment
G = Government spending
X = Exports
m = Imports
Factors affecting long run economic growth:
(a) saving rate
(b) population growth
(c) productivity Growth
(d) Education
(e) political stability
(f) Free trade