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, lead to an increase in productivity and ultimately higher per capita income. Development of strong labor unions (choice A) may lead to higher wages for unionized workers, but may also result in unemployment as employers may choose to outsource or automate jobs to avoid high labor costs. More rapid population growth (choice B) can lead to a larger workforce, but also puts a strain on resources and may result in lower per capita income. An international minimum wage law (choice D) may increase wages, but it could also lead to unemployment as employers may choose to relocate to countries with lower wages.

Which of the Following Would Be Most Likely to Cause