Author Question: What policies can a government undertake to achieve faster economic growth? What will be an ideal ... (Read 89 times)

SGallaher96 · **on:** Jun 29, 2018

What policies can a government undertake to achieve faster economic growth?

What will be an ideal response?

Question 2

Which of the following is the best definition of economic growth?

A) the opportunity cost of capital
B) the sustained expansion of production possibilities
C) the investment in capital and consumption goods by an economy
D) increased development of land and entrepreneurship
E) the opportunity cost of consumption

lkanara2 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

There are several policies a government can undertake. First the government must insure that the preconditions for growth are present. The government must insure that economic freedom exists, that property rights are enforced, and that markets are free. After these crucial preconditions are in place, the government can create incentive mechanisms to save, invest, and innovate; can encourage saving; can encourage research and development; can encourage international trade; and can improve the quality of education.

Answer to Question 2

B