You are an economics 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% 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 property rights protection, free and fair competition, and efficient government service delivery can create a better environment for businesses to invest and grow. This can lead to an increase in productivity and economic growth, which can help to shorten the time necessary to double the size of the country's economy. Cutting taxes and government spending can also be helpful in stimulating economic growth, but this should be done in a responsible and sustainable manner. Increasing barriers to international trade, halting immigration, and suspending the rule of law can have negative consequences for economic growth and should be avoided.

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