What can a nation do to increase its economic growth? Why is economic growth among the major national economic goals of all countries?
A nation must increase its production possibilities in order to experience economic growth. Ingredients for economic growth include capital accumulation, investment in the labor force to increase productivity, investment in technology, and promoting the entrepreneurial spirit. Economic growth is a major national economic goal of all nations because it increases the average absolute standard of living for the nation.
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Which of the following explains the ability of the U.S. economy to avoid diminishing marginal returns and experience accelerating growth in the early to mid-20th century?
A) immigration B) additions of a greater amount of capital of the same quality C) a decrease in the quality of labor D) continuing technological change
Taxes levied on a firm's earnings ________ the effective cost of funds
A) lower B) raise C) have no effect D) none of the above
The reduced form equation for X
A) regresses the endogenous variable X on the smallest possible subset of regressors. B) relates the endogenous variable X to all the available exogenous variables, both those included in the regression of interest and the instruments. C) uses the predicted values of X from the first stage as a regressor in the original equation. D) uses smaller standard errors, such as homoskedasticity-only standard errors, for inference.
Which of the following events is least likely to take place under a fixed exchange rate system?
A) an increased volume of trade because of a decline in exchange rate volatility B) increased cross-border capital flows C) increase in cost of trade because of higher transaction costs D) increased cross-border labor flows in integrated economies