E+D Economies - Health

Question 1

Constrains because…

Answer 1

• Poor health reduces workers productivity now - need all money they can get so work even when they feel sick - decrease productivity - LRAS keeps left, limiting real GDP and economic growth
  
  • ^^ revenue also decrease if quantity isn’t as high as it could be - decrease profits - less corp tax rev - limit development
• Also keeps children out of school - adults stay at home due to illness and can’t gain income for family - kids have to earn income for family - can’t go to school - low human capital - low productivity workers - constrain growth and development

Question 2

Fix

Answer 2

Aid - donations to countries in need - more money to spend on healthcare
- Spending on healthcare - improved health - increase productivity - promote both growth and development
- ^^ LRAS shifts out - increase real GDP - increase economic growth
- ^^ or increase productivity increase profits - increase corp tax rev - increase development
- Can also mean sick workers can be treated and go to work again - kids don’t have to work for them - kids go to school - increase human capital - increase productivity - increase future growth and development

Question 3

Eval

Answer 3

• Aid may not lead to growth and development
• ^^ corruption - government officials accept bribes and illegally abuse power for own personal gain
• ^^ aid goes to them instead - remain poor healthcare - workers remain unproductive - limited growth and development 650

Question 4

Example

Answer 4

1980 Kenya HIV and AIDs epidemic - today over 1.6M people have HIV infection