Supply & Demand - Faculty.utep.edu

P0 uct vity .dE,conomic Gro h oducfv'tyf.conomic growth occurs when a nation'sEveryone benefits when scarce resources aretotal output of goods and services increasesused efficiently. This is described by the termover time. This means that the circular flow in productivity, which is a measure of the amount ofoutput produced by a given amount of inputs in aiglL~ 1.3 becomes larger, with more factors ofprospecificperiod of time. Productivity goes up whenductlOn,goods, and services flowing in one direcevermore output can be produced with the sametion, and more payments flowing in the oppositedirection. A number of factors are responsible foramount of inputs in the same amount of time. Foreconomic growth, but productivity is the most example, if a company produced 500 units of almportant.product in one period, and if it produced 510 inThe Circular Flow of Economic ActivityProductMarketsBusinessIncomeGoodsServicesGood5ervkesBusinessesLandCapitallaborEntreprene urSFactorMarketsCHAPTER 1 WHAT IS ECONOMICS? 15