Author Question: Differentiate between positive and negative incentives.[br][br][b][color=#165FFA]Question ... (Read 59 times)

madam-professor · **on:** Jun 30, 2018

Differentiate between positive and negative incentives.

Question 2

Which of the following is false?
a. Accepting a reduction in current income to acquire education and training can increase future earning ability, which can raise the standard of living.
b. Improvements in literacy stimulate economic growth by reducing barriers to the flow of information and raising labor productivity.
c. One problem of providing enough education in poorer countries is that since children in developing countries are an important part of the labor force at a young age, there is a higher opportunity cost of education in terms of foregone contribution to family income.
d. Investment alone guarantees economic growth per capita.

macybarnes · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Positive incentives either increase benefits or reduce costs and thus result in an increased level of the related activity or behavior. Negative incentives either reduce benefits or increase costs, resulting in a decreased level of the related activity or behavior.

Answer to Question 2

d