ured by the following formula; Per capita nominal GDP = Nominal GDP / Population, Per capita real GDP = Real GDP / Population. Seven factors determine economic growth. Natural resources such as land, mineral deposits, waterways; climatic conditions provide an essential foundation to economic growth. Combined with the other resources of capital, labor and enterprises, natural resources can be developed and organized to increase the productive capacity if the nation. Consequently the quality and size of the labor force is a major determinant of economic growth. Education and vocational training are essential the growth potential of a nation. The promotion of education and job training schemes increase the knowledge, skills and flexibility of the workforce that contributes to potentially higher levels of productivity and efficiency. Whether from natural increase or immigration population growth can cause a higher level of economic growth. An increasing population requires increased public spending on housing, education and other social needs while businesses expectations of increased demand induce higher levels of private investments. Research, innovation and technological developments are essential to any economy wishing to increase their long-term productive capacity. Improved technology lifts overall efficiency and raises the productive base to the economy. An important prerequisite for economic growth is capital accumulation. Private investment spending on plant, machinery and equipment ensures the future production of goods and services. The greater the degree of capital accumulation the greater the potential for increased production. High levels of inflation cause market interest rates to rise and this upward movement can aversively affect business confidence and levels of investment. Periods of inflation generally disadvantage companies by increasing costs and squeezing business profits. The political stability of the nation is a vi...
