Why Are Some Countries Richer Than Others Essay - 1488 Words

Why are Some Countries Richer than Others? Poverty is still the biggest problem the world faces from day to day. Every country suffers from it to some degree, however certain places are greater effected than others. This is because the level of economic growth differs from country to country. The greater amount of growth the less room there is for poverty. This is simple reason why some countries are richer than others. If countries fail to move forward than it can present many problems. Mainly the needless suffering of many, and generally a lower level of living for all those caught in the trap. It is true that growth does create it own problems such as pollution and congestion, but these are acceptable compromises to reduce the†¦show more content†¦For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from c ountry to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output. Soil in places such as Africa can barely sustain horticulture so these improvements would prove useless to those societies. Simple things like this can bridge the gap between countries throughout the world. In the short run, if a country is to sustain economic growth aggregate demand must increase, when the economy has a spare capacity, so it can operate inside its production possibility curve. However, for an economy to continue to produce more goods and services aggregate supply must also increase, which many poorer countries struggle to do. Countries also need larger inputs of capital to accommodate for this growth. The economy obeys the law of diminishing returns, meaning that each new bit of capital yields a slightly lower return than the one before. What is interesting here is that it implicates that poorer countries should grow fast er than the rich ones. This is because since the poor countries start with less capital, in theory they should get higher returns from each new input of investment. There are other views that contribute inShow MoreRelatedWhy Some Countries Richer Than Others Essay1579 Words   |  7 PagesUsing economic theory explain why some countries are richer than others. Abstract This paper tries to analyze why some countries are richer than others. Economic theory is used to identify the different factors affecting countries to be richer or poorer. Introduction One of the fundamental questions regarding the world during all the time is why some counties are richer than others. 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