Human Capital Capital Investments Natural Resources SSE6E7 The student will describe factors that influence economic growth and examine their presence in Europe.
Vocabulary O G ross D omestic P roduct: Total value of all the goods and services produced in a country in one year. O One way used to tell how rich or how poor a country is O Can be used to tell if the economy of a country is getting better or getting worse O Raising the GDP can mean higher st standard rd o of living O Lite teracy r rate te : the percentage of a country’s people who can read and write
SS6E7 a. Explain the relationship between investment in human capital (education and training) and gross domestic product . O Human capital Human capital O Education, training, skills, and health of workers in a business or country O To increase the GDP, countries must invest in human capital O Russia, Germany and United Kingdom have invested in human capital. O Literacy rate in these countries is nearly 100%. O However, Russia has the most poverty of the three countries. O In the former Soviet Union, everyone was assigned a job. O Today workers must show they are skilled and valuable to the business in order to keep their jobs
Check for understanding Which is an example of investing in human capital? 1. Cash b. Factories c. Highways d. education a. A country that does not invest in human capital will have problems 2. because There will be no money to pay its workers. a. Workers will learn on their own the skills they need. b. Businesses will not pay the taxes to pay for good schools. c. Workers who are not educated, skilled, and healthy are less d. productive What is human capital? 3. A country’s standard of living a. The cash a business has to spend b. Investment in the workers of a business or country c. The buildings, equipment, and property owned a business d.
SS6E7 b. Explain the relationship between investment in capital (factories, machinery, and technology) and gross domestic product . O Ph Physi ysical al capita capital: l: factories, machines, technologies, buildings, and property needed by businesses to operate. O New technology can help a business produce more goods for a lower price. O Former Soviet Union did not do a good job of investing in physical capital. O Not investing in physical capital can keep workers from being productive. O Russian Federation having to invest in capital improvements.
Check for understanding Which is an example of investing in physical capital by a company? 1. Constructing a new factory a. Keeping old delivery trucks b. Training workers to do their jobs better c. Keeping old computers in order to save money d. The Soviet Union did not invest in capital improvements, so Russian 2. workers today Do not want to increase their standard of living. a. Are not as productive as workers in other countries. b. Work in brand new factories and are very productive. c. Have shut down their factories until new ones are built. d.
SS6E7 c. Describe the role of natural resources in a country’s economy. O Natural resources: tural resources: resources found in nature such as forest, fertile soil, and water O If countries do not have natural resources they need to manufacture goods, they must import them. O This will add to the cost of goods and services. O If a country has many natural resources, it can trade these to other countries for the goods and services it needs. O Example: United Kingdom has used most of its supply of coal. Russia is a major exporter of oil and natural gas. Money has helped many Russians become wealthy. Caution: Resources won’t last forever. Russia must find ways to develop other ones and not use up the existing one.
Check for understanding Which natural resources have helped the Russian economy in the 21 st 1. century? Oil and natural gas a. Highways and factories b. Machines and equipment c. Education and health care d. Why is a country better off if it does not have to import natural 2. resources? Other countries may need the resources. a. Buying from other countries costs more money. b. People in other countries don’t want to sell their natural resources. c. Businesses have a hard time using the natural resources that are d. located nearby.
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