Imagine a family of 10 where only 2 people work. They would be not so well off. Imagine that 7 of them work. They would be much better off.
An economy is something similar. The more the employment, the better off the economy. The only difference is that here everyone in the family works for themselves. The more work done, the better off everyone's life will be.
An economy would always tend towards full employment in the long term unless political reasons prevent people from creating jobs. For example, socialism in India prevented people from creating their own enterprises. The government did not have the capital to create jobs for everyone, and India remained poor.
People in poverty couldn't pay attention to the governance of their own country, and corruption creeped in.
Now, india has so many unemployed people, that by the time they are all employed, India will become a very rich country.
An economy is something similar. The more the employment, the better off the economy. The only difference is that here everyone in the family works for themselves. The more work done, the better off everyone's life will be.
An economy would always tend towards full employment in the long term unless political reasons prevent people from creating jobs. For example, socialism in India prevented people from creating their own enterprises. The government did not have the capital to create jobs for everyone, and India remained poor.
People in poverty couldn't pay attention to the governance of their own country, and corruption creeped in.
Now, india has so many unemployed people, that by the time they are all employed, India will become a very rich country.
1 comments:
I have a problem with your analogy between a family and a whole country. People in a family work for other people *outside* the family. Thus they get an inflow of money, which is good for the family. In a country, people work for each other. It's not clear why a larger number of working people will create a larger inflow of money.
Of course, a larger number of working people will get a larger amount of work done, which may lead to a larger amount of technological development etc.
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