Question

Question 2

1. Discuss how labour productivity and living standard are related.                                   (6 marks)

2. Examine how property rights affect a nation's standard of living.                                 (6 marks)

3. Suppose the government grants a tax concession on companies' investments in order to encourage private investment. Examine (with the aid of a diagram) the possible impact of a tax concession on the loanable funds market in an economy.                                                                                                    (7 marks)

4. Teenage unemployment is generally higher than unemployment for people ages 25 or over in many economies. Discuss how this phenomenon can be explained (at least partially) by minimum wage law.      (6 marks)

Answer 1

Question 2:

a. labor is very important for any firm or factory. He plays a very basic and essential role in generating the production for any organization or factory. The labor produces the productivity decides the product market, companies’ profits, countries economic development. So, the labor productivity is a deciding factor for change the company and country economic fluctuations. So, it is absolutely related to each other of labor production standard of living.

b. This is really a peculiar relation of property rights with a nation’s standard of living. If the government allows the unconditional property rights, everyone had a complete right on their property in further they will not cooperate with the public. If it happens, the nation’s standard of living will absolutely dissolve and the economic growth will not go up further. So, the property rights will give more negative impact rather than positive on the nation’s standard of living.

c. If the government grants a tax concession then the other countries investments will increase in the way of FDI’s (Foreign Direct Investments) so the country infrastructure and technology will develop. The more investments will show the path of establishing more companies so the unemployment issue will resolve and also countries GDP (Gross Domestic Product) will attain more percentage. The government took a decision of tax concession leads to the development of so many factors in the country including the nation’s economy.

d. Unemployment is a general and common issue for any country. So many factors are included in unemployment like teenage and adult unemployment. In most of the countries, so many teenagers came to competition for adult employment so it is really a hectic pressure on the government to provide sufficient jobs for all the employment seekers, as per the minimum wage law. Nowadays, teenagers doing similarly studies and job so it will help their daily and education expenses. The government needs to take care of these teenagers by subsidies without consideration of race, color, caste, and religion. So, there is a lot of scope of reducing somewhat unemployment issue from teenagers side.