The year is 2020. The economy has been on the upswing for five years. But then, something unexpected happened: a recession hit and GDP per person fell to $28,500 from over $30,00 in just one quarter! What went wrong? One factor was that capital investment had fallen by 3%. In this article we explore how an increase in capital will increase real gdp per person. Given that capital investment has fallen by just a few percentage points, it is not surprising that GDP per person fell. But what if the economy had seen an increase in investing of 100%? What would happen to real GDP per capita then? A simple equation shows us: $30k = $188,00*(100/60)$. When we divide both sides of this equation by 60 and solve for “y”, we get y= $50,833. This means that when you put more money into acquiring or making new assets – such as buildings, machinery etc., your output will go up accordingly! In other words: invest today so you can create tomorrow. Treasure Hunt Tip #065: Give
