Which of the following would be most likely to cause the per capita income of less-developed countries to rise?
A) development of strong labor unions
B) more rapid population growth
C) investment expenditures that enhance the human capital of labor force participants
D) an international minimum wage law

Question

Quizplus · Accepted Answer

Investment expenditures that enhance the human capital of labor force participants, such as education and training programs, can increase productivity and skills, leading to higher incomes. This has been seen in countries such as South Korea and Taiwan which invested heavily in education and reaped high economic growth rates. Strong labor unions (A) may improve working conditions but may also lead to higher wages that could discourage job creation and reduce competitiveness. More rapid population growth (B) may actually hinder economic development by putting strain on resources and the environment. An international minimum wage law (D) could increase global income equality, but could also lead to job losses and reduced competitiveness for less-developed countries.

Which of the Following Would Be Most Likely to Cause