Explain whether each of the following would increase the long-run rate of econom

Question

Explain whether each of the following would increase the long-run rate of economic growth and why or why not.

a. An increase in consumption
b. Subsidies for scientific research
c. Lower interest rates(Hint: What effect will lower interest rates have on investment spending)
d. Increased education spending
e. An increase in depreciation in the economy

Which of the following taxes, if lowered, would result in the greatest increase in the long run economic growth rate? Explain. Which of the following taxes, if raised, would result in the greatest increase in the long run economic growth rate? Explain.

a. Sales tax
b. Tax on investment income
c. Tax on labor income

Explanation / Answer

d. Increased education spending b. Tax on investment income

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