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Institutions that Promote Economic Growth definitions

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  • Human Capital
    Knowledge and skills acquired through education and training, enabling individuals to be more productive in the workforce.
  • Public Education
    Government-funded schooling that increases the population’s technical abilities and productivity, driving economic growth.
  • Public Health
    Government investment in medical care and nutrition, ensuring a healthier workforce that contributes to higher productivity.
  • Property Rights
    Legal protections that allow individuals and firms to control assets, reducing risk and encouraging entrepreneurship and investment.
  • Entrepreneurship
    Initiative to create new businesses, fostered by secure asset ownership and government support, vital for economic expansion.
  • Investment
    Allocation of current resources to projects like factories or technology, aiming to boost future output and productivity.
  • Savings
    Portion of household income not spent on current consumption, enabling firms to access funds for productive investments.
  • Tax Incentives
    Government policies that reduce tax burdens to encourage households to save and firms to invest in future growth.
  • Subsidies
    Financial support from the government to firms, often for research and development, enhancing technological progress.
  • Research and Development
    Activities focused on creating new technologies, often supported by government subsidies, crucial for increasing productivity.
  • Infrastructure
    Physical systems like roads and power lines built by the government, lowering business costs and improving efficiency.
  • Free Trade
    Open exchange of goods and services across borders, integrating economies and enabling access to foreign investment.
  • Globalization
    Integration into the worldwide marketplace, allowing countries to benefit from international trade and investment.
  • Foreign Direct Investment
    Purchase or construction of factories and facilities in another country, stimulating economic growth especially in developing nations.
  • Productivity
    Measure of output per worker, increased by education, health, technology, and efficient resource allocation.