Governments can _______ to increase productivity.

Question

Quizplus · Accepted Answer

By using tax revenues to invest in physical capital (such as roads, bridges, and other infrastructure), governments can create a more favorable environment for businesses to operate in, which can ultimately lead to increased productivity. Defunding underlying infrastructure or reducing spending on higher education can have the opposite effect and actually hinder productivity. Creating new taxes for investing in physical capital may be less effective since it could lead to a burden on businesses, which could have a negative impact on productivity.

Governments Can _______ to Increase Productivity