Chapter 39, Problem 6MCQ

To determine

To know:

An example of a government infrastructure investment.

Explanation of Solution

An increase in the aggregate production of goods and services in an economy over time is considered economic growth. To promote economic growth rapidly, the government uses expansionary fiscal policies such as increasing fiscal spending on infrastructure, physical and human growth, and research and development.

The government investment in infrastructures includes spending on construction and renovations of roads, ports, information networks, railways, warehouses, powerlines, and other storage facilities to support the various market activities that will promote economic growth. These infrastructures will improve the better connectivity between the forward and backward linkages in the economy.

The spending on roads, ports, information & telecommunication, and powerlines are examples of infrastructure spending in an economy.

Thus, option “e” or “All of the above” is correct.