Business, 25.03.2020 00:13 Jcmandique3444
Roasia is a developing economy with a large population. Its public healthcare and transportation infrastructure is very poor, which creates a bottleneck for industrial development. Leading industry experts have been claiming that investment in infrastructure so far has not been sufficient. According to them, there is a pressing need to step up government expenditure on public infrastructure. With the debate heating up, the government proposed a 30 percent increase in infrastructure investment this year. This is also expected to reduce unemployment considerably from the current level of 6 percent. With a 30 percent increase in investment, industry experts predicted that unemployment would decline from 6 to 4 percent in two years' time. However, the unemployment level at the end of two years was even lower at 3 percent. Which of the following, if true, can explain this outcome?
A. Industry experts in Roasa believe that only higher government expenditure can improve economic efficiency
B. Private healthcare in Roesia is very expensive
C. The current level of unemployment is also the economy's natural rate of unemployment
D. With increased government expenditure, the economy will move up along the short run Philips curve
E. Inflation is expected to fall in the coming years
Answers: 1
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Roasia is a developing economy with a large population. Its public healthcare and transportation inf...
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