Natural Resources per Worker
A third determinant of productivity is natural resources. Natural resources are inputs into production that are provided by nature, such as land, rivers, and mineral deposits.
Natural resources take two forms: renewable and nonrenewable. A forest is an example of a renewable resource. When one tree is cut down, a seedling can be planted in its place to be harvested in ‘the future Oil is an example of a nonrenewable resource. Because oil is produced by nature over many thousands of years, there is only a limited supply. Once the supply of oil is depleted, it is impossible to create more Differences in natural resources are responsible for some of the differences in standards of living around the world. The historical success of the United States was driven in part by the large supply of land well suited for agriculture. Today, some consumes the Middle East, such as Kuwait and Saudi Arabia, are rich simply because they happen to be on top of some of the largest pools of oil in the world Although natural resources can be important, they are not necessary for an economy to be highly productive in producing goods and services. Japan, for instance, is one of the richest countries in the world, despite having few natural resources. International trade makes Japan’s success possible Japan imports many of the natural resources it needs, such as oil, and exports its manufactured goods to economies rich in. natural resources.
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