Factors that affect growth and development, such as: investment, education and training
Countries grow and develop faster when they invest in new machinery and infrastructure, and when they improve the skills of their workforce through education and training.
Formula
Human Capital Index = f(years of schooling, health outcomes)
Real World
South Korea invested heavily in universal education from the 1960s onwards; by the 1990s it had transformed from a low-income country into a high-tech exporter, with firms like Samsung leading global markets.
Exam Focus
For 'assess' questions, argue that education raises both supply-side productivity and long-run aggregate supply, not just short-run output.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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