Lisavia's Ten Principles Of Economics

First, it is clear that Lisavia’s President is fully aware of one of the Ten Principles of Economics, which suggest that a country’s standard of living depends on its ability to produce goods and services. Theories of the economy have shown that a nation - state is able to experience an advanced standard of living only, if it is able to produce more goods and services per average worker in a given period of time. This economic growth is subject to a number of factors, including the promotion of education; facilitation of free trade and the promotion of research and development of new technologies. Each one of these factors will enhance a nation 's productivity.
A vital determinant of productivity is human capital, and because it is one of …show more content…
Many had suggested that trade is a type of technology, in many ways, because when a country exports a product in exchange for another one; the nation benefits as if had invented a new technology. Trade can permit an increased specialization for a nation. As a result, firms become more productive, and help to further the economic growth. Utilization of the theory of comparative advantage, which refers that nations specialize in producing the goods that they can yield cheaply relative to other goods, will help to shift from a country that is self-sufficient, and it generates everything for the consumption of its inhabitants; toward one that employ specialization to produce particular goods and services, and sells them on global markets for other goods and services. As a matter of fact, international trade fosters competition, encourage companies to renovate, improve products, and preserve prices low and quality high in order to maintain or increase their market. This allows firms to attain a level of production that they could not conquer by selling just to the local market. Likewise, free trade broadens economic freedom by increasing opportunities, choices, and standards of living for a country. Correspondently, the above facts and in order to guarantee the productivity of free trade for the nation is necessary to enforce the current policies, and negotiate innovative ones to take advantage of …show more content…
Fostering productivity growth through innovation should be one of Lasavia’s President Concerns. His government should be a facilitator that motivates organization s to innovate in manners that aid the public interest. For instance, the creation of advanced projects including the development of alternative energy sources, dropping costs and bettering medical care through the use of health information technology, not only would help to improve living standards for the country, but also a possibility of additional revenue through locating a breakthrough in these fields. Furthermore, government of the nation should subsidize research and development and the training of workers in the use of leading-edge technologies. As well it should incentive collaboration between research institutions as institutions and universities, and