Chapter 16: Problem 3

Each of the following except slowed our rate of economic growth in the \(1970 \mathrm{~s}\). (LO4) a) research and development spending b) pollution regulations and requiring pollution reduction c) health and safety regulations d) rising energy costs

Short Answer

Expert verified

The option that did not slow down the rate of economic growth in the 1970s is a) research and development spending, as it contributes positively to economic growth by stimulating innovation and leading to improved efficiency and productivity.

Step by step solution

Understanding economic growth

Economic growth refers to the increase in the overall productivity and output of an economy over a period of time. There are several factors that can affect economic growth, such as technological advancements, government policies, and external factors like energy costs.

Option A: Research and Development Spending

Research and development (R&D) spending generally contributes positively to economic growth. By investing in R&D, businesses and governments stimulate innovation, leading to improved efficiency and productivity. Therefore, increased R&D spending would likely lead to a higher economic growth rate, rather than slowing it down.

Option B: Pollution Regulations and Requiring Pollution Reduction

Pollution regulations and requirements for pollution reduction can slow down economic growth in the short term, as firms may need to invest in new technologies or processes to comply with regulations. However, these regulations can also encourage innovation and lead to long-term environmental benefits. In the context of the 1970s, such regulations likely did slow down economic growth to some extent.

Option C: Health and Safety Regulations

Health and safety regulations can have a similar impact on economic growth as pollution regulations. In the short term, they may require businesses to invest in new technologies and processes to ensure the safety of workers. This can lead to a slower economic growth rate. However, in the long term, these regulations can improve the well-being and productivity of the workforce. In the context of the 1970s, these regulations may also have slowed down economic growth to some extent.

Option D: Rising Energy Costs

Rising energy costs can negatively impact economic growth by increasing the cost of production for businesses. This can lead to reduced output and investment, as well as a decrease in consumer spending due to higher prices for goods and services. In the 1970s, the oil crises led to significantly higher energy prices, which likely slowed down economic growth. After analyzing all the options, we can conclude that the only option that didn't slow down the rate of economic growth in the 1970s was: a) research and development spending