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Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509
BuyFind

Principles of Macroeconomics (Mind...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305971509

Solutions

Chapter
Section
Chapter 12.3, Problem 3QQ
Textbook Problem
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Describe three ways a government policymaker can try to raise the growth in living standards in a society. Are there any drawbacks to these policies?

Expert Solution
To determine
Ways of increasing standard of living and its drawback.

Explanation of Solution

The ways in which a government policymaker can try to raise the growth in living standards in a society include the following:

  1. (1) More investment in capital;
  2. (2) More foreign investment;
  3. (3) Increasing education;
  4. (4) Protecting property rights and promoting political stability;
  5. (5) Encouraging free trade by pursuing outward oriented policies;
  6. (6) Lowering population growth rate;
  7. (7) Encouraging research and development.

The drawbacks of the mentioned ways are listed as follows:

  1. (1) More investment in capital is at the opportunity cost of current consumption...

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