Adam Smith, The Father of Economics defines various theories that help countries to boost the economy. He found that how your strategies will impact on the economy in various aspects and how you can apply it to achieve economic growth. Certainly, many countries applied it and boost their economy. Remember economic boost not only make the country more powerful but also helps people of that country to attain equity strength.
So here are various theories on which every country have to use to boost the economy.
Theory of Labour
We know how our labour strength of country impacts the growth. So firstly understand there are two types of labour. One who involved in the production and other in unproductive work.Productive labour directly involved in the manufacturing of any product that has value for a long time whereas unproductive labour is who are in service sector once their work has done when the product is over.
Let’s understand China their most labour is in the manufacturing sector and due to this, they are boosting the economy every time more than other countries.
Theory of Free Market
Adam Smith always thinks that those countries that have no dependent on government and government also don’t involve in trading rules rise more compare to others. The nation always has to make policy to strengthen and make the global market free so that trading will work more efficiently.
The free market will help other countries to assist export and import rules for goods and service in a free manner. More important is that it helps to attain achievement and make countries trading rules according to demand and supply rule.
Theory of Competition
The free market always helps other companies to rise. It also increases competition between companies and helps customers to know various choices according to need.
Remember competition will improve quality and try to give the best product at the minimum price so that need will attain and make the customer happy.
Theory of Self Interest
We know every nation has different resources, so for the global rise, you have to depend on other countries for other resources. It always leads to understand self-interest of one country and how they will get it from other’s so that they rise to attain enrichment in the supply chain.
Theory of mutual support
If any country wants to rise, it’s responsibility of representatives to understand what they need from others and what they want from us. After analysing understand their needs and help to enrich mutual support.
Theory of Mercantilism
Adam Smith said when any country trade their goods and services with others then try to get and accumulate more valued goods and services which value will rise exponentially for the upcoming period. Remember if any country who had more these type of accumulation of resources they develop more compare to other and will become super power in forthcoming years.