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pixiedust7891 pixiedust7891
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A year ago
A policymaker in Newlandia believes that the reason his country is poor is because there are not enough people who are entrepreneurs. To fix the issue, he proposes that 100 random graduates from the national university will be chosen and mandated to start a new company, though they will get a loan to do so. What might be a reason that this is NOT a good idea?

▸ Entrepreneurship is not a reason why countries would differ in their productivity

▸ The 100 graduates, if they are successful, will make others try entrepreneurship which would result in too many people becoming entrepreneurs and not enough people working

▸ The 100 randomly chosen individuals may not have not have a comparative advantage in entrepreneurship but rather a comparative advantage doing something else

▸ The mandate would reduce the total efficiency units of labor in the economy, reducing output
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Macroeconomics

Macroeconomics


Edition: 3rd
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gronk44gronk44
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A year ago
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