Suppose that a new government is elected in Eurnesia.The new government takes steps toward improving the court system and reducing government corruption.The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting.These changes will probably
A)raise real GDP per person and productivity in Eurnesia.
B)raise real GDP per person but not productivity in Eurnesia.
C)raise productivity but not real GDP per person in Eurnesia.
D)raise neither productivity nor real GDP per person in Eurnesia.

Question

Quizplus · Accepted Answer

Improving the court system and reducing government corruption are likely to create a better investment climate by increasing the level of trust in the government, reducing the cost of doing business, and potentially attracting more foreign investment. This, in turn, could raise real GDP per person and productivity in Eurnesia, as firms become more efficient and effective in their operations.

Suppose That a New Government Is Elected in Eurnesia