What action would likely have the MOST positive effect on the Iraqi economy?
A.
encouraging population growth by reducing restrictions on immigration
B.
reducing the length of the school day so minors can seek employment
C.
giving businesses tax breaks when they purchase new machinery
D.
raising export tariffs in order to raise more government revenue
C. giving businesses tax breaks when they purchase new machinery
This action would likely have the most positive effect on the Iraqi economy. By providing tax breaks to businesses when they purchase new machinery, it would incentivize investment and modernization of the country's industrial sector. This would lead to increased productivity, job creation, and economic growth.
Why would it be difficult for an entrepreneur in Saudi Arabia to start a new business in the oil industry?
A.
The economy of Saudi Arabia is a pure command economy.
B.
The oil industry is controlled by the government of Saudi Arabia.
C.
The oil industry is controlled by the Organization of the Petroleum Exporting Countries.
D.
The economy of Saudi Arabia is dependent on foreign direct investment for capital.
B. The oil industry is controlled by the government of Saudi Arabia.
It would be difficult for an entrepreneur in Saudi Arabia to start a new business in the oil industry because the government of Saudi Arabia controls the industry. The government has a monopoly over the exploration, production, and distribution of oil in the country through the state-owned Saudi Arabian Oil Company (Saudi Aramco). This means that individuals or private enterprises would face significant barriers and restrictions in entering and competing in the oil sector, as it is a highly regulated and controlled industry by the government.
To determine the answer to this question, we need to evaluate each of the options and consider their potential impacts on the Iraqi economy.
A. Encouraging population growth by reducing restrictions on immigration: This option may have both positive and negative effects on the economy. On the positive side, an increase in population can lead to increased consumption and demand for goods and services, which can boost economic growth. However, it can also strain resources, such as housing, employment opportunities, and social services, especially if the infrastructure is not well-established. Additionally, this option might not directly address the immediate needs of the Iraqi economy.
B. Reducing the length of the school day so minors can seek employment: While allowing minors to seek employment might provide immediate income for some families, it is crucial to consider the long-term consequences. Limiting education can adversely affect human capital development, workforce productivity, and innovation in the long run. Investing in education is often considered a more sustainable approach to fostering economic growth and development.
C. Giving businesses tax breaks when they purchase new machinery: This option can have positive effects on the Iraqi economy. Providing tax breaks for businesses incentivizes investment in new machinery, which can enhance productivity and efficiency. This, in turn, can stimulate economic growth, create job opportunities, and contribute to technological advancement. However, considerations should be made to prevent misuse or abuse of these tax breaks.
D. Raising export tariffs in order to raise more government revenue: While raising export tariffs can generate more government revenue in the short term, it can also have unintended consequences. Higher export tariffs can lead to reduced international competitiveness, decreased trade and foreign investment, and potential retaliation from other countries. These factors can negatively impact the overall economy, potentially outweighing the short-term benefits of increased government revenue.
Considering these factors, option C (giving businesses tax breaks when they purchase new machinery) is likely to have the most positive effect on the Iraqi economy. This option promotes investment, innovation, and efficiency, which can drive sustainable economic growth. However, it is essential to evaluate other factors, such as the country's specific economic conditions, institutional capacity, and long-term sustainability, when implementing such policies.