00:01
Okay, so i see that you need help with these questions.
00:02
For number one, why is gdp per capita used as an estimate of the average standard of living in a country? so gdp is used as an estimate of average standard of living in a country because it measures the total value of goods and services produced within a country adjusted for population size.
00:49
Oops, size.
00:53
This provides a rough indication of the average income per person and overall economic well -being of a country.
01:21
Okay.
01:23
Why is, so number two, why is economic growth key for countries who want to escape poverty.
01:29
So economic growth is key for countries who want to escape poverty because it leads to increased production, higher incomes, and improved living standards.
02:01
As the economy grows, more resources become available for investment in infrastructure, education, and health care, which further contributes to poverty reduction in overall development.
02:14
Number three, how do institutions decrease total factor productivity, that's tfp, and create incentives for economic growth? institutions increase total factor productivity and create incentives for economic growth by providing a stable and predictable environment for businesses and individuals to operate in.
03:01
This includes establishing property rights, enforcing contracts, and maintaining law, a rule of law.
03:21
When institutions function effectively, they reduce transaction costs, encourage innovation, and promote efficient allocation of resources, all of which contribute to higher tfp and economic growth...