Homework on Macroeconomics
Shshank Mehta; Roll no 26
1 List and describe four determinants of productivity
Innovation: Regionally available innovation resources positively influence productivity growth. Taxation: The two indicators for taxation, the tax burden on investments and the tax burden on highly qualified employees, both influence productivity growth negatively. Regulation: Labour market regulation has a strong positive impact on productivity growth. Tighter regulation can indeed increase the productivity of the working population, but at the price of reducing the participation of the population in the working process. Labor: Skill level of the human capital is an important determinant of productivity. Highly qualified employees would result into high productivity. 2 In what ways is your (soon-to-get) MBA degree a form of Capital? The (soon-to-get) MBA degree is a form of capital from the perspective of knowledge and skills that is has allowed us to harness. While simultaneously being employed allows us to practice our learning in office environment from Business communication to CSR our (soon-to-get) MBA degree has covered it all. Amount of investment (fees for MBA) is the quantifiable basis that we would Capitalize and accrue dividends (benefits in our work life) in the form of accelerated career growth 3 Explain how higher savings leads to higher standard of living. What might deter a policymaker from trying to raise the rate of saving The act of saving is similar to a farmer who does not eat all his corn at harvest time but instead, puts some aside to plant next year. He could eat better today if he ate everything, but it would come at the expense of sacrificing the future. Higher savings converts to higher spending power (discretionary spending) allowing individuals in an economy to see higher quality goods in effect increasing their standard of living. A recessionary environment would deter the policymaker from trying to raise the rate of saving...
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