Transcript What is the relationship between human capital, capital investment

What is the relationship between
human capital, capital
investment, and gross domestic
product?
Capital Investments
Gross Domestic Product
Human Capital
A country or business may invest in human
capital by:
• Investing in education
• Providing health care
Capital Investment or Capital Goods
A country or business may invest in capital
goods by:
• Purchasing machinery or technology to
perform tasks required to produce the
product or products for the business
• Purchasing supplies needed for a business
Gross Domestic Product
The gross domestic product or (GDP) of a nation
is the total value of the things produced and
services provided by a country that year.
GDP = private consumption + gross investment
+ government spending + (exports − imports),
or,
GDP = C + I + G + (X − M).
How does the unequal distribution of
resources affect European countries?
• Countries need resources to supply industry with
the fuel and resources needed to produce the
products for the particular industry.
• Countries in Europe possess varying amounts of
resources. Great Britain’s supplies are fading.
Russia has a great amount of resources but
difficulty accessing them. Germany still has a
great supply of resources. Italy has few
resources.
Conclusion
In order for a country to thrive economically,
they need to invest in human capital(education
and healthcare) and capital goods(machinery
and technology). A country’s investment in
human capital, capital goods, and their
resources will have a great impact on the (GDP)
of that country.
GDP Chart
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
United Kingdom
Russia
Germany
Italy
Investment in Human Capital(literacy
rates)
Series 1
100%
99%
99%
99%
99%
Series 1
99%
98%
98%
98%
98%
United Kingdom
Russia
Italy
Germany