You are an economic consultant and have been contacted by an official from a developing country.She tells you that her country's economy is currently growing at 2 percent per year.She asks you how long it will take for her country's economy to double in size; you tell her it will take 35 years.She then asks you what the government can do to shorten the time necessary to double the size of the country's economy.What should you tell her?

Question

Quizplus · Accepted Answer

Encouraging the development of growth-positive institutions, such as promoting entrepreneurship, improving infrastructure, and investing in education and innovation, can lead to a more conducive environment for economic growth. This can attract more foreign investment and increase productivity, ultimately speeding up the process of doubling the size of the economy. Cutting taxes and government spending can also be helpful, but it depends on the specific situation of the country and the effectiveness of the government's policies. Increasing barriers to international trade or suspending the rule of law can have negative consequences on economic growth and discourage foreign investment. Immediately halting all immigration can also have negative effects on the country's workforce and productivity.

You Are an Economic Consultant and Have Been Contacted by an Official