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Natural Resources, Human Capital, Capital Goods, & Entrepreneurship
Factors of Economic Growth Natural Resources, Human Capital, Capital Goods, & Entrepreneurship
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Gross Domestic Product – Page 16
Directions: Cut out note cards & GDP definition First glue down GDP definition, then glue on flap into notebook
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GDP GDP is the total value of all the goods and services produced in that country in one year. It measures how rich or poor a country is. It shows if the country’s economy is getting better or worse. Raising the GDP of a country can improve the country’s standard of living.
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Factors of Production There are 4 factors of production that influence economic growth within a country: Natural Resources available Investment in Human Capital Investment in Capital Goods Entrepreneurship The presence or absence of these 4 factors determine the country’s Gross Domestic Product (GDP) for the year.
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Natural Resources All of the things found in or on the earth; “gifts of nature”. All resources are limited. Examples: land, water, sun, plants, time, air, minerals, oil, etc.
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Human Capital This is all of the skills, talents, education, and abilities that human workers possess---and the value that they bring to the marketplace. Examples: computer/reading/writing/math skills, talents in music/sports/acting, ability to follow directions, ability to serve as group leader & cooperate with group members A country’s Literacy Rate impacts Human Capital (the percent of the population over 15 that can read/write).
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Capital Goods This is all of the goods that are produced in the country and then used to make other goods & services. Examples: tools, equipment, factories, technology, computers, lumber, machinery, etc.
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Entrepreneurship People who provide the money to start and operate a business are called entrepreneurs. These people risk their own money and time because they believe their business ideas will make a profit. They bring together natural, human, and capital resources to produce foods or services to be provided by their businesses.
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Standard of Living The level of wealth and material comfort available
The higher a country’s GDP, the better standard of living for the people within the country. In order for a country to have an increasing GDP, it must invest in human capital through education & training, and it must produce goods that have value to be sold within the country or exported.
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Literacy Rate A literate person is one who can read and write.
Being literate is a major factor in whether a person can get a job and be successful in the workplace. Literacy rate is the percentage of a country’s population over the age of 15 that can read and write. The United States has a very high literacy rate. About 99% of Americans are literate.
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Economic Impact Countries with high literacy rates are generally wealthier. They can compete in the world economy. Having a high literacy rate is important to the success of the people in a country. People who can read get better jobs, earn more money, and can afford to buy better things. They can afford housing, food, healthcare, & clothing for their families.
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High Literacy Rate = High Standard of Living
The standard of living (economic level of the people in the country) is often higher in countries where the literacy rate is high. High Literacy Rate = High Standard of Living
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Standard of Living This measures how well-off the people are in a country. Housing, food, health care, educational opportunities, and income can be part of the standard of living. Basically: what it costs a family to live
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Improving Literacy Rate
The goal of every country is to have a 100% literacy rate among its people. One reason that many people cannot read/write is that their communities cannot afford to pay for teachers or schools. Many governments, missionaries, & aid groups come to the poorest countries to assist the people in educating their children
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Literacy Rate & Standard of Living – Page 17
Directions: Cut out notes & glue into IN
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Which Capital? – Page 18 Directions:
Cut out pockets, glue into IN (make sure to put glue on the small side of the solid line Cut out descriptions, put them in the correct pocket
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