To explain:
The sources of
Explanation of Solution
According to modern economic theory, basically human capital, natural resources and physical capital
are the main sources of economic growth for modern countries.Growth calculating measures calculate the donation of each of these three variables to the home economy.
Natural resources stock sourceinvolves land and the inputs born naturally inner or outer part of the land such as minerals and wood. These resources help to boost up agro-basedindustries and forest-based industries tourism, etc. These kinds of industriescontribute a lot to economic growth.
Physical capital stock sourceincludes buildings, machinery tools,means oftransformation, and computers. These capitalresourcesassist the production process of output, which ultimately contribute the economy to grow.
Human capitalresourcesare the people themselves who use all the otherresources. Human capital comprises of the labor volume mainly skilled labor, knowledge and skills, innovations etc which results in technological advancement in any economy. By making huge investment on education, training, research and development in order to increase human capital stock per capita
Modern economic theory:
Modern economic theory is distinct from the other theories in the field of economic growth. Modern economic theory focuses mainly on human capital then natural resourcesand finallyphysicalcapital as the sources for economic growth in modern times.
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Chapter 25 Solutions
Principles of Economics (Second Edition)
- Identify and briefly discuss the underpinnings of economic growth, including examples.arrow_forwardWhat are at least nine determinants of economic growth. Discuss at least two of them in detail.arrow_forwardDiscuss the role of institutions in economic growth. What type of institutions are important for economic growth, and why?arrow_forward
- How do culture and institutions interact, as two fundamental causes of long-run economic growth? Explain with at least one real-life example.arrow_forwardDescribe the modern economic growth. List the FIVE (5) public policies thatrelated to economic growth.arrow_forward“Economic growth doesn’t simply depend on having more natural resources, more or higher-quality labor, more capital and so on; it depends on people’s incentives to put these resources together to produce goods and services” Do you agree or disagree? Why? Explain.arrow_forward
- What are the three main sources for economic growth in any economy?arrow_forwardTechnology may have a macro- and micro-level effect on economic growth.What types of technologies are needed to have such macroeconomic consequences? On a micro-level?arrow_forwardWhat are three policies governments can use to promote economic growth? And how effective would they be ?arrow_forward
- Based on article "Technology and economic growth: From Robert Solow to Paul Romer" by Rui Zhao, Solow mentioned technology (At) and capital per unit of effective labor (Kt) have a significant influence on a country's ability to “catch-up” or “converge” to a steady-state level (K*). Why did Solow model assume At as a black box in economics? Explain in brief.arrow_forwardWhich of the following explains the importance of education in economic growth? Group of answer choices All the other answers investing in education strengthens human capital investing in education strengthens physical capital investing in education strengthens technologyarrow_forward
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
