Professional Documents
Culture Documents
SAVING AND INVESTMENT: It says that the capital can only be acquired by saving and
investment.
-When the government creates polices which encourages savings and encourages
investment it is encouraging economic growth.
-investment encouraging economic growth because increasing in capital requires
investment which
comes from saving.
-savings means delay in consumption, to consume more in the future, people choose to
consume later ( when you save, you are saving the part of your financial resources.)
-government influence the amount of savings and investment through savings rate and
interest rate.
INFRASTRUCTURE: (some economies argue that improvements in infrastructure could lead to
higher productivity and some says that the higher productivity will lead to greater infrastructure).
FREE TRADE:
-when the government adopts outward oriented policies known as free trade
- (inward-oriented policies) limits the investment from abroad. It is aim to raise living
standards by avoiding interaction with other countries.
-(outward-oriented policies) elimination of restriction on trade and foreign investment. Its
promotes integration with the world economy or if the two nations or individuals with different
resources endowments and production capabilities specialize in producing a smaller numbers of
goods and services and engage in trade, both parties will benefit. Total output will rise.
EDUCATION: is an investment in human capital/labor it has the negative and positive effect
-the positive effect is it can stimulate economic growth
- and the negative effect is that the departure of educated or professional people from one
country, economic sector, or field for another usually for better pay or living conditions(brain
drain).
For example: here in the Philippines the college student graduated can be expected to earn
almost twice as much per year as a high school graduate.