1. Factors Influencing GDP How do levels of human and physical capital, natural resources, and entrepreneurship influence a country’s GDP?

2. OBJECTIVES Students will be able to: define key terms such as entrepreneurship, GDP per capita, gross domestic product, human capital, literacy rate, natural resources, physical capital, standard of living. explain how changes in a particular factor will influence the GDP of a country. analyze economic data and identify to which type of resource the data refers. compose a written piece giving evidence to support which factors seem to have the most significant effect on GDP.

3. THE FED EXPLAINED… REAL VS. POTENTIAL GDP

4. ORGANIZE YOUR CARDS AND WORK WITH YOUR GROUP TO SORT THEM Human Capital Physical Capital EntrepreneurshipNatural Resources India China Japan Germany United Kingdom Russia

5. KEY TERMS Human capital is… A measure of the economic value of an employee's skill set.

6. KEY TERMS Physical capital is… Physical capital refers to any manufactured asset that is applied production, such as machinery, buildings, or vehicles

7. KEY TERMS Entrepreneurship is… The process of identifying and starting a new business, bringing together the required resources, while taking both the risks and rewards associated with the business.

8. KEY TERMS Natural resources are… The gifts of natural available for production of goods and services

9. KEY TERMS Literacy rate is… The percentage of the adult population who can read, write, and use printed material

10. KEY TERMS Gross Domestic Product is… -The total value of all final goods and services produced in an economy within a given time period. GDP per Capita is… -The GDP of a country divided by the country’s population and serves as a common way to measure standard of living Standard of Living -The level of material wealth enjoyed by the average person within an economy

11. ANSWERS TO GDP AND GDP/CAPITA (PPP 2013) India GDP = $4.962 Trillion GDP/Capita = $4,000 Japan GDP = $4.729 Trillion GDP/Capita = $37,100 China GDP = $13.37 Trillion GDP/Capita = $9,800 Germany GDP = $3.227 Trillion GDP/Capita = $39,500 United Kingdom GDP = $2.378 Trillion GDP/Capita = $37,300 Russian Federation GDP = $2.553 Trillion GDP/Capita = $18,100

12. DEBRIEFING QUESTIONS Which factors influencing GDP seemed to be the most important in determining GDP in the countries you analyzed? What, if any, relationship exists between the Literacy Rate of a country and that country’s Standard of Living as measured by GDP per capita?