5. Which of the following would be the most helpful in raising Australia’s stand

Question

5. Which of the following would be the most helpful in raising Australia’s standard of living in the long run? Discuss. a. A policy of making firing workers more difficult, other things held constant. b. A government policy of giving more assistance to first home buyers and hence raising the overall level of consumption. c. A government policy of increasing funding on universities and TAFE (technical and further educations) colleges. d. A policy of increasing money supply along with fiscal expansion, other things held constant.

Explanation / Answer

Option(C) is Right as it raises human capital and TFP.

Option (A) - labour market is rigid, and rather likely to reduce labour participation.

Option ‘B’ and‘D’ only increases AD.

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