2. CH. 15: ECONOMIC GROWTH AND PRODUCTIVITY CIE3M1 M. Nicholson

3. Economic Growth In Canada  Canadians enjoy a much higher standard of living with many more goods & services available today then in the past.  The key reason is economic growth caused by increased productivity.

4. Economic Growth In Canada What is economic growth?  increase in a country’s (region’s) output or goods & services over a period of time  shown by the rate of increase in the real Gross Domestic Product (GDP) per person

5. Economic Growth In Canada Real means adjusted for inflation and per person gives a more accurate picture of the wealth of the country E.g. India has a much larger GDP than Kuwait, but has a much smaller GDP per capita

6. Economic Growth In Canada Standard of living  GDP per person has two major weaknesses when used to show the wealth of a country 1. items that increase GDP but do not improve the standard of living (e.g. increased crime) 2. excluded items that improve the standard of living (e.g. leisure, homemaking)

7. Economic Growth In Canada 1. Leisure 2. Omitted goods & services 3. Side effects 4. Underground economy 5. Kinds of goods produced 6. Distribution of income

8. Economic Growth In Canada Economic growth and the production possibilities curve

9. Economic Growth In Canada Economic growth since 1900 – since 1900 GDP has grown more than five-fold Causes of economic growth – increased productivity (output per person)

10. Economic Growth In Canada 1. Specialization  Division of labour Advantages: time-saving, rising standard of living Disadvantages: loss of pride in craftsmanship, growing dependency

11. Economic Growth In Canada 2. Technological progress a) Better ways of organizing production  mass production, automation, work study b) Development of new machinery c) New types of products

12. Economic Growth In Canada 3. Increase in the amount and quality of education 4. Increase in the amount of capital available

13. The Staples Thesis Economic historian Harold Innis  throughout Canadian history the development of certain primary products have had a major impact on economic growth (e.g. 16 th C. fish / 17 th & 18 th C. beaver pelts / 19 th C. timber & wheat / 20 th C. wheat, pulp & paper, minerals, oil & natural gas)

14. Economic Growth Benefits and costs of growth  higher material standard of living with increased life expectancy BUT increased stress because of constant change & rapid pace of life along with pollution & decreased resources

15. Economic Growth Unequal economic growth in Canada with Ontario, Alberta, BC having high growth while the Atlantic provinces have low growth

16. Economic Development In Other Countries Low income economies  Gross National Product (GNP) per person < $635 US  60 % of the world in 1991 (e.g. China, India, Sub- Saharan Africa) Middle income economies  GNP per person $636 – $7910 US (e.g. Poland, Thailand, Brazil) High income economies  GNP per person > $7910 US (e.g. Canada, Germany, Japan)