ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Natural resources have a double-edge effect on economic growth, in that the intensity of its use raises output, but increases its depletion rate. Natural resource is a key input in the production process that stimulates economic growth.

Detailed explanation-2: -For example, the exploitation of mineral resources increases GDP, but actually depletes the wealth of any given country. Even environmental pollution may increase GDP through the income generated by industries involved in activities related to mitigating environmental and social impacts.

Detailed explanation-3: -An abundance of natural resources should accelerate economic development because it increases exports so that more capital goods can be imported to build up the economy, and also because the natural resource rents (returns in excess of those required by an efficient producer) can be used to boost capital investment.

Detailed explanation-4: -Rapid population growth continues to be a major underlying force of environmental degradation and a threat to sustainable use of natural resources. It reduces the quality and quantity of natural resources through overexploitation, intensive farming and land fragmentation.