How does government support of health and education programs foster economic growth?
What will be an ideal response?
As the health of the people in a nation improves, they become more productive. They become stronger and less susceptible to disease. For example, if the government provides vaccinations or access to clean water, people will be healthier and the economy is more likely to grow. By helping to finance education, the government can also improve economic growth. Since the benefits of an education do not accrue exclusively to the person receiving an education, the market may produce an inefficiently low level of education and training. If the government offers subsidies for education, more people will receive an education, and the increase in human capital will increase economic growth (particularly if there are increasing returns to human capital).
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Which of the following can always be used to determine the outcome when there are multiple Nash equilibria?
A) the Pareto Criterion B) cheap talk C) Both A and B D) None of the above.
Which of the following is not correct?
a. Unions are exempt from U.S. antitrust laws. b. The Wagner Act of 1935 prevents U.S. employers from interfering when workers try to organize unions. c. The National Labor Relations Board is the U.S. government agency that enforces workers' right to unionize. d. Right-to-work laws prevent firms from hiring permanent replacements for workers who are on strike.
Some nations such as Ecuador chose dollarization because:
a. the currency was depreciating so rapidly it became nearly worthless. b. Ecuadorians wanted to save dollars for eventual emigration to the U.S. c. the Ecuadorian currency was backed by gold,which was confiscated by government officials. d. All of these are reasons why such countries chose dollarization.
Answer the following questions true (T) or false (F)
1. In absolute value, the tax multiplier is greater than the government purchases multiplier. 2. If government increases taxes by the same amount it increases government spending, there will be no effect on aggregate demand: the increase in government spending is offset by an equal decrease in consumption spending by households. 3. The tax multiplier is calculated as "one minus the government purchases multiplier."