Answered: pital. Consider why other governments…

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 1DQ

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Question

Qatar’s government has been very successful in promoting economic growth through investment in infrastructure and human capital. Consider why other governments do not pursue this strategy to the same extent that it has been done in Qatar.

a. Picture

b. Qatar’s government can invest heavily in its economy because of

- the tax revenue generated through the sale of its natural resources.

- the relatively large size of its economy compared to other nations.

- its popularity as a tourist destination.

- the relatively large size of its population compared to other nations.

a. Government spending on infrastructure and education is an example of
fiscal policy. This type of
expansionary
fiscal policy generally leads to
spending.
deficit
contractionary
debt
b. Qatar's government can inve
s economy because of
surplus

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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