Answer to Question #281467 in Macroeconomics for rro

Question

. Why does productivity matter for living standards? 2. What sort of public policy should Pakistan adopt to ensure growth and improved living standards? 3. What issues may hinder growth and long run living standards in Pakistan? 4. Is Pakistan stuck in a poverty trap? How can we get out of it in the long run? 5. Is Pakistan in a recessionary or growth phase of a business cycle? Justify your answer with reasoning. 

Answer 1

Why does productivity matter for living standards?

The level of productivity is the most fundamental and important factor in determining the standard of living. Raising it allows people to get what they want faster or get more in the same amount of time. Supply rises with productivity, which decreases real prices and increases real wages

What sort of public policy should Pakistan adopt to ensure growth and improved living standards?

Public policies that can be adopted are the monetary and fiscal policy which will be used to regulate the economy, economic growth, and inflation so that long-run growth is possible.

What issues may hinder growth and long run living standards in Pakistan?

Political upheavals caused by weak economic growth and lack of jobs may hinder growth and long run living standards in Pakistan.