what is the relationship between economics and human life. Give a detailed account in about 500 words
Answers
Explanation:
Human capital and economic growth have a strong correlation. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people.
Human capital and economic growth have a strong correlation. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people.Human capital refers to the knowledge, skill sets, and experience that workers have in an economy. The skills provide economic value since a knowledgeable workforce can lead to increased productivity. The concept of human capital is the realization that not everyone has the same skill sets or knowledge. Also, the quality of work can be improved by investing in people's education.
In a growing economy, companies also take on additional borrowing from banks to expand production due to higher consumer demand. The loan proceeds are usually used for large purchases of assets such as manufacturing plants and equipment. The added production also leads to higher wages and increased employment as more workers are needed for the increase in consumer demand for a company's products.
Human capital is positively correlated to economic growth since investment tends to boost productivity. The process of educating a workforce is a type of investment, but instead of capital investment such as equipment, the investment is in human capital.
Answer:
Human capital and economic growth have a strong correlation. Human capital affects economic growth and can help to develop an economy by expanding the knowledge and skills of its people.
Human capital refers to the knowledge, skill sets, and experience that workers have in an economy. The skills provide economic value since a knowledgeable workforce can lead to increased productivity. The concept of human capital is the realization that not everyone has the same skill sets or knowledge. Also, the quality of work can be improved by investing in people's education.
What Drives Economic Growth
Economic growth is an increase in an economy's ability, compared to past periods, to produce goods and services. Economic growth is measured by the change in the gross domestic product (GDP) of a country. GDP is a representation of the total output of goods and services for an economy. For example, if a country has a GDP rate of 2.5% for the year, it means the economic growth of the country rose by 2.5% from a year earlier. In order to determine how human capital impacts growth, we must first look at two key drivers of economic growth in an economy.
Consumer Spending
It's estimated that consumers are responsible for more than two-thirds of the economic growth in the U.S. economy.1 As consumers become employed or experience wage increases, they tend to increase their purchases of clothes, cars, technology, homes, and home goods such as appliances. All of that spending creates a positive ripple effect leading to improved employment in various industries such as retail, auto manufacturers, technology stores, and home builders, to name a few. The spending also leads to higher GDP growth throughout the economy.
Business Investment
The increased GDP growth from consumer spending leads to improvements in business conditions. As companies become more profitable, they tend to invest more money into their businesses to create future growth. Business investment can include new equipment and technology purchases. The investments businesses make are called capital investments. Capital investments, which require large outlays of capital or cash, are designed to boost a company's productivity and profits in the long term.