Answer to Question #277156 in Microeconomics for Takia

Question

“Natural resources are the most important determinant of long-term economic growth” 

– do you agree with this statement. Briefly explain your views.

Answer 1

Solution:

The statement is true.

 

Natural resources are one of the major factors of long-term economic growth. The quality and quantity of available natural resources are very critical to enhancing the long-term growth of any nation. Natural resources are a key input in the production process that stimulates economic growth and development.

Natural resources provide essential raw materials and other products and are a vital source of jobs and income. They also support the provision of ecosystem services necessary to develop human and social capital.

A wealth of natural resources accelerates economic growth and development since it increases exports, such that more capital goods can be imported to build up the economy, including boosting capital investment through the returns generated from them.