Question

Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. Increasing taxes on income from savings Providing tax breaks and patents for firms that pursue research and development in health and sciences Pursuing inward-oriented policies Imposing restrictions on foreign ownership of domestic capital

Answer 1

Answer:

The correct answer to the following question is options B) and D) are correct.

Explanation:

For developing nations to keep growing and developing, it is important that they promote innovations, manufacturing , promoting investment etc, so if they provide tax breaks to firms then firms would be more likely to invest more in the nations economy, so therefore option B) applies.

If a country increase taxes on the savings income, then it would lead to decrease in the investment in the economy, people would be less willing to spend and invest. So this option doesn't apply.

If a country pursues inward oriented policies , then  market surplus won't be maximized, so this option will also not apply.

Option D will apply because if a developing nation sets its property right correctly and clearly and they impose contracts on the foreign firms , then it would be beneficial for them.