Question

Economic growth and public policy Suppose a wealthy French citizen buys $2 million worth of stock issued by an American corporation. The American firm uses the proceeds for a factory expansion. This is an example of _____ foreign investment in the United States. Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply. Protect property rights and enforce contracts. Give families cash payments on the condition that their children show up for school and medical exams. Provide tax breaks and patents for firms that pursue research and development in health and sciences. Increase taxes on income from savings. Which of the following are possible outcomes of rapid population growth? A reduction in human capital per worker A reduction in capital per worker An increase in technological knowledge All of the above

Answer 1

Answer: Direct foreign investment, Provide tax break and patent for firms that pursue research and development in health and sciences, A reduction in capital per worker

Explanation:

Direct foreign investment : This is a long term capital flows into the economy of a country by a public and private individuals. These long term capital flows can be used in the building of an asset in the recipient country such as the building of factories for factory expansion which will increase the productivity of the firm.

Productivity is the increase in the output per head in an economy. Productivity and growth can be increased in an economy by providing tax break and patent for firms that pursue research and development in health and sciences. This means that during this period such companies will not pay tax , this will reduce the cost of Production of those firms that enjoy the tax break and also it will increase their profit. On the other hand, government can give patent for firm that pursue research and development in health and sciences. This patent when it is granted will give the firm the exclusive right to own,use and dispose an invention for a period of time. It will enable the firm to use the invention alone for a specific number of years.

A outcome of a rapid population growth is the reduction in capital per worker, when there is an increase in the population of a country it often result in the fall in the standard of living of the people.