WEALTH CREATION USING PRINCIPLES OF ECONOMICS

There is a difference between prosperous and pitiable nations. Wealthy countries are more developed in trade and industry. This implies that the countries are able to generate more wealth and the citizens have enough wealth to spend on schooling, foodstuff, health and extravagance. The people in these nations earn substantial amount of salaries which enables them to seek more finance in order to buy houses and own cars (Mankiw, 2014). The countries also have good service businesses which mean that they assist people like doctors and teachers. Poor countries mean that they are less economically developed. These countries make less money and they can only spend less on schooling, foodstuff, health and other extras. Citizens in these nations cultivate their personal uses which mean that they are farmers (Mankiw, 2014).

Firms and markets can increase the wealth of the poor countries through various practices. Principles of economics play an important role in creating and maximizing the country’s wealth. People response to incentives make the people decide based on the benefits which make them desire to work more. Competitive market economies are a good way of creating efficiency resulting to increased value to the country (Immerfall & Therbron, 2010). Government policy is most useful when the market fails. This is because the government will come up with strategies that will generate market power. Firms in the country can create wealth for the country by their ability to produce goods and services which will improve the standards of living for the people. An increase in operating firms in the country will create many job opportunities which will offer employment to the people translating to more money for the country as the people can be able to spend more on food, education, health and luxuries as well as being able to buy houses and cars (Immerfall & Therbron, 2010).

Reference

Mankiw, G. (2014). Principles of Economics. Cengage Learning

            Immerfall, S., & Therbron, G. (2010). Handbook of European societies: Social transformation in the 21st century. New York: Springer