Which of the following would be most likely to improve the standard of living of a less-developed country?
A) Development of strong labor unions.
B) More foreign investment, attracted by the expectation of economic and political stability.
C) Adoption of trade barriers (higher tariffs and quotas).
D) Widespread use of price controls to allocate goods and resources.

Question

Quizplus · Accepted Answer

More foreign investment can provide the less-developed country with capital, technology, and expertise that it may not possess internally. This, in turn, can create jobs and improve productivity, resulting in an increase in the standard of living. Development of strong labor unions (A) may help improve working conditions and wages for workers, but it may also create labor market rigidities that can discourage investment. Adoption of trade barriers (C) can protect domestic industries, but it can also lead to retaliation from other countries, reducing trade and reducing economic growth. Widespread use of price controls (D) can lead to shortages, hoarding, and black markets, reducing economic efficiency and growth.

Which of the Following Would Be Most Likely to Improve