What generates Economic wealth of Nation?

Last updated at April 16, 2024 by

Suppose there are 2 countries A and B

A has more natural resources and fertile land

B is a Desert .It has more industries and factories

B purchases raw material from A and manufactures them

Which Country will be more rich

 

B will be more rich country

It is because mere possession of natural resources does not make a country rich

The Resources have to be transformed by a production process

What generates Economic wealth of Nation

Economic Wealth of a country does not depend upon possession of resources

It depends upon how these resources are used to generate flow of production

This Production leads to income and wealth

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Suppose there are 2 countries A and B Country A Fertile Land More Natural Resources No Industries Sells Raw Material Sells Finished Goods Country B Desert Land Very little Resources More Industries Which Country will be More Rich? Country B Possessing of Natural Resources doesn’t make a country rich It needs to be transformed by a production process What generates Economic wealth of Nation? Economic Wealth of a country does not depend upon possession of resources It depends upon how these resources are used to generate flow of production This Production leads to income and wealth Suppose there are 2 countries A and B Sells Raw Material Sells Finished Goods Country A Fertile Land More Natural Resources No Industries Country B Desert Land Very little Resources More Industries Which Country will be More Rich --> Why? Country B Possessing of Natural Resources doesn’t make a country rich It needs to be transformed by production process What generates Economic wealth of Nation Economic Wealth of a country does not depend upon possession of resources It depends upon how these resources are used to generate flow of production This Production leads to income and wealth

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo