Question

Cohleland, a developing country, has a government that wants to encourage the country’s growth.

In each scenario, what policy would you recommend the government of Cohleland to enact in order to increase growth?

The country has an abundance of capital and labor with low levels of human capital and technology.The country has low levels of capital, human capital, and technology; however, there is plenty of labor.

The country has an abundance of capital and labor with low levels of human capital and technology. Also, Zackburgh, a rich city-state near Cohleland has been offering fast track citizenships to any person from Cohleland who has earned a college degree.  

Answer 1

Answer- For an expnomy to prosper or to grow itself it must encourage the unemployed to get jobs or cut the medical supply or medicare to only those who cannot afford it and bringing back the profits that are lost to the foreign firms. Another way to grow the economy is to bring the beightest mind in the country so that development can take place and also making a cost analysis periodically to see where the money is being wasted.

In the first scenario the country has abundance of capital and labor but low technology and human capital. It makes the country rich in it’s resources but using them optimally. Thus the country should edicate the people and make them skilled this would not only make the people grow but also help in development of the economy as more skilled people will innovate new technoly and this innovation should also be rewarded. Also the country can set up manufacturing units and provide cheap labor to firms so that cost of production can be low and they can sell the goods to other countries. The country can take the help of research and development department of foreign countries and learn from them.

In the second scenario the firms have low capital, technology, human capital but plenty of labor. In yhis situation the country can tale advantage of it’s cheap labor to work in manufacturing units and thus it will create jobs. Also side by side the country can educate the laborers so that they can upgrade their skills and work more efficiently.

If the neighbouring country has been giving citizen ships to people with college degrees then the Cohleland shpuld encourage education in it’s country and give priority in jobs to people who het edicated in their country. They can also impose taxes on people earning from another country and sending money back to their home country. This will discourage people to change their country and thus benefit of skilled people will be with the home country.