Governments can stimulate productivity by ?
Correct answer: D. encouraging private investment
- A. Imposing higher taxes on capital
- B. encouraging more labour intensive work to reduce unemployment
- C. reducing spending in education
- D. encouraging private investment
Explanation
Private investment can raise productivity by increasing the capital available per worker and encouraging improved technology and production methods. Higher taxes on capital or reduced education spending would generally work in the opposite direction.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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