Ruritania\'\'s Ministry of Economics has considered various plans to stimulate e
ID: 1204923 • Letter: R
Question
Ruritania''s Ministry of Economics has considered various plans to stimulate economic growth in the kingdom. Which of the following proposals would have the best chance of success?
Ruritania's Ministry of Economics has considered various plans to stimulate economic growth in the kingdom. Which of the following proposals would have the best chance of success? To increase the general level of skills in the labor force, improve the literacy rate with reading programs at all levels, K-12 and adult. To lower unemployment by discouraging layoffs, require businesses to continue paying the salary of any worker who loses his or her job until s/he finds a new one. To reduce risk and encourage entrepreneurship, require the government to take control of and operate any businesses that do not earn a profit for two consecutive years, including providing salaries for the workers and managers equal to the average for that industry plus 10%. To enhance efficiency and minimize the size of the private sector, require private firms to enter into partnerships whereby ownership of firms is split between the government and private owners equally. Which source of productivity growth does the best proposal from above directly influence? Human capital Technology Physical capital Income equalityExplanation / Answer
Second option, that is, discouraging layoffs is not a convincing method of lowering unemployment as it enables the workers to realize that they can continue to be paid without working which increases the tendency to remain unemployed. Third option negates the possibility of a profit which is the very motive of business. Last option also reduces the efficieny of private firms
Hence, it is the investment in human capital that makes them effective labor and can lead to prolonged growth. So the correct answer is A. For the second part of the question, the answer is A, HUMAN CAPITAL
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