Question

Economists observe growth in economies over time. You notice they use terms such as productivity and GDP in order to explain economic growth. I want you to think of examples of economic growth in the modern day. Think of factors that impact growth in a positive or negative light.

For this assignment I want you to choose any country that you would like to focus on, in terms of economics. Every country can improve their standard of living through different policies. Please answer the questions below:

• List the determinants of productivity.
• List three policies that attempt to raise living standards by increasing one of the determinants of productivity for the country you chose.
• Provide a real life example of your policies implemented in another country as evidence.

Answer 1

Determinants of productivity are the level of education/literacy, efficiency prevalent in the market, physical and institutional infrastructure, capital and human capital, the scale of innovation related to creation and adoption of new technology, etc.

Three policies that attempt to raise the living standards by increasing one of the determinants of productivity for the country which I chose: Now in the case of China, the three policies to increase the capital output are the

Capital Investments and 100% owned foreign enterprises where foreign businesses are allowed to enter the domestic economy, increasing the scale of infrastructure and physical, capital output. Foreign capital and technological means being introduced.

Free market oriented policies such as special economic zones in order to attract foreign direct investment across the various regions. The regions would be strategically located so that businesses find it easier to find components for their products at one place, such as in the case of Apple which helped the company scale its production level.

Policy of restructuring state owned enterprises. Reducing the dependence on state owned enterprises and increasing the share of private enterprises in industrial production, increasing industrial output.

All these measures would help to increase the industrial and capital output, thereby leading to a rise in living standards as output would increase and per capita income would also inch higher.

Free market oriented policies such as Special Economic Zones have been set-up in several regions all around the world. There has been an increasing trend of such zones being setup in African countries such as in Nigeria for example in collaboration with China. This has increased industrial output led by export growth.