Question

Nolivia is a small and poor nation, but its current president has a genuine desire to create more wealth for Nolivia citizens. The president has received recommendations from several of her advisors. Which of the following recommendations is likely to create the most wealth for Nolivia?
Establish a business environment that promotes and rewards entrepreneurship. T/F

Answer 1

Answer:

True

Explanation:

One of the biggest reason for poverty is unemployment and this leads to lower purchasing power of the people of Novia. If Novia wants to increase the living standard of people through wealth creation then the country must invest on developing Entrepreneur ecosystem and giving tax incentives so that the international firms would invest in Novia. This would help in jobs creation and the exports of these firm will help in saving costs of borrowing for balance of payments.

Answer 2

Answer:

True

Explanation:

One of the pillars of capitalism is entrepreneurship. On capitalistic countries or free market economies, private actors (consumers and suppliers) freely decide how to best allocate resources. Usually consumers and suppliers do a much better job of allocating resources than governments. Another pillar of capitalism is private property which is closely related to both free resource allocation and entrepreneurship.

An entrepreneur is someone who wants to start their own business and eventually make it grow. Entrepreneurs need a business environment that supports the and guarantees them that all their effort will be worth it, i.e. the government will not take over private companies.