5. Which of the following would be the most helpful in raising Australia’s stand
ID: 1217710 • Letter: 5
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.