Society can increase its real output and income in two fundamental ways: (1) by increasing its inputs of resources and (2) by raising the productivity of those inputs.
There are five factors that appear to explain changes in productivity growth rates:
- Technological Advance - Approximately 40%
- Quantity of Capital-Approximately 30%
- Education and Training-Approximately 15%
- Economies of Scale and Improved Resource Allocation -Approximately 15%
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