Like the cake being of same size only the slices change in size. Few become richer everyday while others become poorer. The wealth can not be created. Wealth only circulates amoung people. Someones increase in income means some other person's decrease in income or loss. Everyone can not be rich at the same time. Is this view correct in economics?
2007-02-04 21:37:43 · 5 answers · asked by Justanian 1 in Social Science ➔ Economics
yes. wealth can be created. you are right that there is only one cake. this is better explained by the concept of the Production Possibility Frontier or PPF. However, the boundaries of the PPF can be increased with the introduction of technology, efficiency and better methodologies making more and more possible for everyone.
read more below.
2007-02-04 21:39:54 · answer #1 · answered by Smiddy 5 · 0⤊ 0⤋
Yes, wealth can be created.
I think that you may have thought that wealth and money were one and the same. They are not.That is, money supply is the physical account of what we use, in America the dollar, to buy something else.
Wealth is not an actual dollar amount counted in money value. Wealth is the actual value of all the assets that you currently own. Therefore, if for example, you buy a house that is valued in dollars at $100,000 and then you live in it for a couple of years, and the value goes up to $200,000, you have created wealth for yourself. However, you are still making the same payment on the house as you were when you made the purchase.
Thus, wealth can increase, and only if the Fed increases the supply of money can the actual circulation of dollars increase.
2007-02-05 15:11:31 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Just imagine you are in an island all alone. Every time you go out and hunt, fish or collect fruits, you are creating wealth.
Wealth being this bunch of stuff that makes you happy and satisfied and/or that you can trade for things that make you happy and satisfied.
This "island analogy" is also very good to see how an increment in productivity can increase your well-fare. If you work more you can eat more and better.
2007-02-05 07:34:46 · answer #3 · answered by Anonymous · 1⤊ 0⤋
Thumb up and Agree. That's why we have been seeing those on top with money and power die die also must protect their ricebowl at all costs even they are at wrong or find some scapegoat for their misdeed.
That's y in my country I am poor so that those bad doggies can be rich and have comfort life at all times. And the rest prefers to follow their evil bidding without question in order to survive.
An old women told me honestly she got no choice for the sake of living because she is powerless to resist those evil biddings.
But I resisted because I am condemned before I can start my earning in these world as well as I got nothing at all to lose. heehee..
I am proud to sing It's my life. hehe...
2007-02-05 05:58:33 · answer #4 · answered by Anonymous · 0⤊ 0⤋
no...production of wealth/value/profit (whatever you'd like to call it) is the transfer of currency or valuable goods from 1 individual to another. However, banks can create wealth without circulating it, they just have to continue printing but stop burning...haha...but that's illegal ;) XD
2007-02-05 08:06:56 · answer #5 · answered by Pu 1 · 0⤊ 1⤋