Which of the Following Government Policies Is Not Likely to Encourage

question 15

Multiple Choice

Which of the following government policies is not likely to encourage economic growth?

• A)High taxes on companies that spend a lot on capital formation
• B)The use of tax revenues for investment and capital formation
• C)Special subsidies for capital-intensive forms of production
• D)Promotion of education and training programs for workers
• E)Imports of better capital equipment from abroad

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Definitions:

Law Of Supply

An increase in the price of a product will increase the quantity of it supplied; and conversely for a decrease in price.

Quantity Supplied

The quantity of a product that suppliers are ready and capable of offering for sale at a certain price during a defined timeframe.

Equilibrium Quantity

The quantity of goods or services supplied that is exactly equal to the quantity demanded at the market equilibrium price.

Supply Decrease

A reduction in the quantity of a good or service that producers are willing and able to offer at any given price.