Economic Growth and Human Capital
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Questions and Answers

What is a possible consequence of reducing benefits on the labour market?

  • An increase in the quantity of labour (correct)
  • A decrease in the quantity of labour
  • An increase in the unemployment rate
  • No impact on the labour market

    • How can raising the minimum wage help reduce the unemployment trap?

  • By increasing the quantity of labour
  • By making work more attractive to workers (correct)
  • By reducing the benefits received by workers
  • By increasing the unemployment rate

    • What is a benefit of investing in infrastructure development?

  • An increase in the productive capacity of the economy (correct)
  • No impact on the economy
  • An increase in the cost of production
  • A decrease in the productive capacity of the economy

    • What is a result of subsidies for R&D and technological progress?

    <p>An improvement in the quantity and quality of capital</p> Signup and view all the answers

    What is a consequence of an increase in the productive capacity of the economy?

    <p>An increase in output and long run economic growth</p> Signup and view all the answers

    What is a potential result of reducing the unemployment trap?

    <p>An increase in output and long run economic growth</p> Signup and view all the answers

    What is the primary effect of reducing trade union power on inflation?

    <p>Reduced cost of production for firms</p> Signup and view all the answers

    What is a potential drawback of infrastructure development projects?

    <p>Overspending and cost overruns</p> Signup and view all the answers

    What is a potential unintended effect of cutting corporation tax rates?

    <p>Increased payments to shareholders</p> Signup and view all the answers

    What is a time-related challenge associated with supply-side policies?

    <p>Time lags in implementation and effects</p> Signup and view all the answers

    What is a potential outcome of reducing income tax rates?

    <p>Workers working less</p> Signup and view all the answers

    What is a potential opportunity cost associated with supply-side policies?

    <p>Alternative investments not pursued</p> Signup and view all the answers

    What is the primary consequence of an increase in education and training of workers on the economy?

    <p>Higher output and long run economic growth</p> Signup and view all the answers

    How would a reduction in direct taxes on workers and firms affect the economy?

    <p>Increased incentive to work longer hours, leading to higher output</p> Signup and view all the answers

    What is the primary reason for a shortage of skilled and educated workers in developing economies?

    <p>Limited access to education and training</p> Signup and view all the answers

    What is the result of an increase in human capital in an economy?

    <p>Higher output and long run economic growth</p> Signup and view all the answers

    How would the immigration of skilled workers affect the productive capacity of the economy?

    <p>Increased productive capacity due to increased human capital</p> Signup and view all the answers

    What is the primary benefit of reducing corporation tax on firms?

    <p>Firms will retain more of their profits to invest in capital</p> Signup and view all the answers

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