Economics Academic Paper

 Economics Academic Paper
Question One
Economists have proposed many economic development theories. One of these theories states that increased production leads to capital increment. Accumulation of this capital contributes to economic growth as investment in other sectors occurs. For instance farmers who produce more end up earning higher returns and they use their money to purchase other products that can meet other needs that they may have. This means their money circulates in the economy and helps the economy to grow. Additionally, agricultural products from such farmers are usually used in varied production processes and this directly contributes to economic growth. Demographics also affect labor and a rise in the population simultaneously expands the labor force. The amount of labor needed is determined by demand patterns hence labor force is controlled mainly by forces of production. This theory states that available opportunities in a country naturally control the demand for labor meaning that an increase in population ultimately results in increased demand for labor. Another popular theory proposed by economists is that of diminishing returns. This theory argues that accumulation of capital and increase in population can reduce the amount of returns or profits generated from production processes if the wages remain constant. This is because of increased exploitation of resources such as land that results in reduction in productivity of such resources or factors. The theory that raises the question as to whether some countries gain more from trade than their counterparts is widely debated by economists. Economists have explained that this theory may be true becaiuse developed countries generally tend to be better in terms of exploiting upcoming opportunities and this sometimes results in the exploitation of poorer countries. Furthermore, richer countries tend to be more industrialized hence specialize in trading in industrial goods which have been known to have higher returns as compared to primary products. Poorer countries, on the other hand, mainly produce and trade in primary products. The trickle-down theory is yet another theory that explains why the main benefits of an economy trickle down to the poorest people in an economy, those that are found at the very bottom of the economic ladder benefit most from the economy. When the government collects taxes and other funds from the rich and the general public, they end up benefiting the poor.

Question 2
Development is a wholesome concept that cannot be solely based on economics. Rather, a country can only be said to be developed if the social well-being of its citizens is met. It is thus societal responsibility to ensure that social development and well-being of its people is improved instead of focusing solely on economic development. Social well-being can help to build social ties and unite a society especially during disasters and national problems. This ultimately enables the country to face such problems more effectively as compared to divided nations. Social development is a huge concept that mainly encompasses caring for the welfare of the people around us. Without this a society cannot grow or make any progress. By embracing social well-being, a society can easily enhance fairness in the distribution of national resources thus improving the living standards of its people and enabling them to relate more cordially with each other. Ultimately good relationships enhance economic development because people feel obliged to contribute towards nation building. It is from this perspective that social development has been directly linked to national economic development. The poorer and under-developed countries tend to have gaps in their social development structures. Poor social development breeds fertile grounds for crime and other issues that hinder development and progress of a nation. By prioritizing economic development, a country can easily create huge gaps between social structures and economic classes. Such a scenario widens the gaps between the rich and the poor in the society, resulting in animosity amongst citizens of one nation. While the rich have the economic prowess to exploit available opportunities, the poor struggle financially and their situation is further exacerbated by inflation. Consequently, in such nations, the rich grow richer while the poor grow poorer and often resort to social vices such as crime and social unrest as well as protesting against these conditions. This is because as the economy develops the rich are able to take advantage of emerging opportunities because they already have the financial muscle to undertake them. Consequently, they get richer and the poor get poorer due to the resulting exploitation. Inflation makes the situation worse and the worst hit are the poor in society. This is why mass protests are common in countries where social development has taken a back seat as compared to economic deve