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Question 1, 10.1 Study Exercise 5 HW Score: 50%, 2.5 of 5 points Part 2 of 3 Points: 0.5 of 1 Save In this chapter

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Question 1, 10.1 Study Exercise 5 HW Score: 50%, 2.5 of 5 points Part 2 of 3 Points: 0.5 of 1 Save In this chapter we discussed four major determinants of growth in real output: increases in the labour force; increases in the stock of physical capital; increases in human capital; and improvements in technology. a. For each of the four determinants, choose an example of a government policy that is likely to increase growth. Determinants of growth An example of a government policy Improvements in technology. A policy to subsidize R&D activities Increases in the labour force. A reduction in unemployment insurance benefits Increases in human capital A policy to subsidize occupation-specific training Increases in the stock of physical capital Reduced corporate taxation b. Discuss the likely cost associated with each policy. The likely cost of the is a reduction in the average quality of firm-worker matches. The other three policies involve the spending of real resources, and thus involve

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