Download E.Q. How is capital Goods and human capital related to a country*s

Georgia Performance Standard: SS7E7 The student
will describe factors that influence economic growth
and examine their presence or absence in Israel, Saudi
Arabia, and Iran.
E.Q. HOW IS CAPITAL GOODS AND HUMAN
CAPITAL RELATED TO A COUNTRY’S GROSS
DOMESTIC PRODUCT?
GROSS DOMESTIC PRODUCT:
(GDP)
The total value of goods and services produced
in a country in a year. Must be produced, not just
sold, so a BMW sold in the US, since it is made
in Germany does not count towards our GDP, but
it counts for Germany
CAPITAL GOODS

Machines, factories,
technologies, etc. used in
production of goods and
services
HUMAN CAPITAL

Employees, the humans, that
produce goods and services
INVESTING IN CAPITAL GOODS AND HUMAN
CAPITAL INCREASES A COUNTRIES GDP.
NATURAL RESOURCES
are materials and components (something
that can be used) that can be found within
the environment. Every man-made product
is composed of natural resources.
HOW DO YOU INVEST IN CAPITAL GOODS?
Investing in capital goods means that you spend
money for newer or better capital with the goal
of making a bigger profit. EX. Building more
factories, upgrading machines, buying new
technology
HOW DO YOU INVEST IN HUMAN CAPITAL?
Investing in human capital means that you
spend money to train or educate your
employees with the goal of making a greater
profit.
EX. Technology training, further personal
education, etc.
SAUDI ARABIA AND IRAN
Some of the largest oil producers in the world
 Human Capital Investment: turning out highly
trained and well educated labor force
particularly in the oil industry
 Capital Investment: Spends on goods related
to oil industry, communication, and technology
 Iran as invests a great deal on technology for
its defense industry

ISRAEL
Depends on technology industries to make up
for the country’s lack of natural resources
 Human Capital Investment: Invests in training
and technology related to medical field,
agriculture technology, mining, and electronics
 Provides high level of training and education!
 Capital Investment: Includes technology,
industrial, communications, and defense
industry

ENTREPRENEUR: SOMEONE WHO IS WILLING
TO TAKE A RISK TO BEGIN A NEW BUSINESS WITH
THE HOPES OF MAKING A RETURN ON THEIR
INVESTMENT
These new businesses or products pump goods
and services into the economy creating an
increase in the country’s GDP