In the real world,investments in public capital,such as roads,airports and schools,can play ________ role in the growth of an economy's potential output,while tax and transfer programs may _________ potential output by encouraging firms to increase the rate of _______.

Question

Quizplus · Accepted Answer

Investments in public capital can play a major role in the growth of an economy's potential output. Tax and transfer programs can increase potential output by encouraging firms to increase the rate of capital formation. Therefore, option C is the best choice.

In the Real World,investments in Public Capital,such as Roads,airports and Schools,can