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
Uses of Indifference Curve Analysis Indifference curve analysis is useful when studying welfare economics as follows: They are used to indicate the amount of income and


Arguments against protectionism   Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo

#question.Constraints of Marris’ Growth Maximisation Model

Price Elasticity of Supply Price Elasticity of supply measures the degree of responsiveness of quantity supplied to changes in  price.  The co-efficient of the elasticity of s

Balance of Payments Perhaps the most immediate reason for bringing in protection is a balance of payment deficit.  If a country had a persistent deficit in its balance of paym

Supply and Demand Discuss and analyze following statement: The Wall Street Journal reported that recent law school graduates were having a very difficult time obtaining jo

Types of Price Elasticity of demand   a)     Perfectly inelastic demand Demand is said to be perfectly inelastic if changes in price have no the quantity demanded so

What are the Methods of Managerial Economics The process of managerial economics deals with aspects of economics and tools of analysis, which are employed by business enterpri

The short run equilibrium of monopolist is displayed below in figure. Figure: Abnormal Profit under Monopoly AR is the average revenue curve, MR is marginal revenue cu