Question

Recommend, based on your above findings, what the government should do to encourage economic growth

Answer 1

The government could apply several policies to encourage economic growth. It can for instance use expansionery fiscal and monetary policy that will increase the spending potential of people and hence increase economic growth. The government can also use supply side policies such as price support programmes for producers and also the setting of minimum wage levels. This will encourage greater employment and boost economic growth. The government can also try and improve the level of technological progress through increased research and development and increased investment. The government can also try and boost international trade through improved exports by devaluing the currency at home. There are thus several policies available to boost the levels of economic growth.