Factors affecting size of national income, Managerial Economics

Factors affecting the size of  National Income

The size of nation's income depends upon  the quantity and quality of the factor endowments at its disposal. A nation will be rich if its endowments of natural resources are large, its people are skilled, and it has a useful accumulation of capital assets.  The following points are of interest:

a)         Natural Resources

These include the minerals of the earth; the timber, shrubs and pasturage available; the agricultural potential (fertile soil,  regular  rainfall, temperature or tropical climate); the fauna and flora; the fish; crustacea etc of the rivers and sea; the energy resources, including oil, gas, hydro-electric, geothermal, wind and wave power.

b)         Human Resources

A country is likely to prosper if it has a large population; literate and numerate sophisticated and knowledgeable about wealth creating processes.  It should be well educated and skilled, with a nice mixture of theory and practice.  It should show enterprise, being inventive, energetic and determined in the pursuit of a better standard of living.

c)         Capital Resources

A nation must create and then conserve capital resources.  This includes not only tools, plant and machinery, factories, mines, domestic dwellings, schools, colleges, etc, but a widespread infrastructure of roads, railways, airports and ports.  Transport creates the utility of space.  It makes remote resources accessible and high-cost goods into low-cost goods by opening up remote areas and bringing them into production.

d)         Self-sufficiency

A nation cannot enjoy a large national income if its citizens are not mainly self-supporting.  If the majority of the enterprises are foreign -owned there will be a withdrawal of wealth in the form of profits or goods transferred to the investing nation.

e)         Political Stability

Posted Date: 11/28/2012 5:58:26 AM | Location : United States







Related Discussions:- Factors affecting size of national income, Assignment Help, Ask Question on Factors affecting size of national income, Get Answer, Expert's Help, Factors affecting size of national income Discussions

Write discussion on Factors affecting size of national income
Your posts are moderated
Related Questions
Menu Costs   Why do firms not change their prices very  frequently? Obviously, the costs of changing prices at  frequent intervals and in small amounts must be more  than the b

Structural Unemployment The decline of the highly localized industry due to international trade causes great problems of regional (structural) unemployment.  If it would take

ISOQUANT ANALYSIS In the long run it is possible for a firm to produce the same output using different combinations of two factors of production.  For instance it the two fact

Compensatory Financing Two other schemes for alleviating the effects of commodity trade instability have been operating for a number of years.  These are the IMF's Compensator

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2 . Thanks a lot!

Write the forecasting techniques There are many forecasting techniques available to person assisting the business in planning its sales. Take for instance a forecasting metho

What is Cyert and March's behavior theory? What are the demerits.

factorsw determining demand

Neo Classical vs Keynesian School We know that Keynesian economics was propounded as a revolution against the then  prevailing orthodoxy  of  the classical school.  In  time,

T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money.  The main element of the Banking System is the Commercial Bank (in Kenya).  The sec