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Chapter 31: Q.13 (page 761)

What are some fiscal policies for improving a society’s human capital?

Short Answer

Expert verified

SPending on education, healthcare, skill development, welfare programs

Step by step solution

01

 Concept Introduction 

Fiscal policy is defined because the policy which is governed by government and that they adjust the tax rates and spending of the nation's economy.

02

Explanation of Solution 

A way of economic policy for encourage the economic process is that the creation of the physical capital. Economic policy increases the govt spending and reduces the charge per unit so as to spice up up the mixture demand which further ends up in increases within the economic output.

When the govt. must finance the borrowing, it are often done throught the loanable funds market which further increases rate of interest and reduces investment demand. When the govt. spends more income on education helps to enhance the productivity of the human.

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Most popular questions from this chapter

Based on the national saving and investment identity, what are the three ways the macroeconomy might react to greater government budget deficits?

Explain why the government might prefer to provide incentives to private firms to do investment or research and development, rather than simply doing the spending itself?

Sketch a diagram of how sustained budget deficits cause low economic growth.

The U.S. government has shut down a number of times in recent history. Explain how a government shutdown will affect the variables in the national investment and savings identity. Could the shutdown affect the government budget deficit?

During the most recent recession, some economists argued that the change in the interest rates that comes about due to deficit spending implied in the demand and supply of financial capital graph would not occur. A simple reason was that the government was stepping in to invest when private firms were not. Using a graph, explain how the use by government in investment offsets the deficit demand.
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