Th2.6: Policies - Improve Infrastructure

Question 1

What are two ways the UK could improve infrastructure?

Answer 1

tax incentives or subsidies on investment

government could spend more money

Question 2

What will the government spending more money result in?

Answer 2

improved technology, making production more efficient so less resources are needed to produce the same amount of goods whilst more technology will mean more goods and services can be produced

Question 3

What is the issue with offering tax breaks / subsidies?

Answer 3

could have adverse effects on the government budget as it will mean they lose tax revenue or incur an opportunity cost as they have to spend money on subsidies - some businesses may use money to evade tax not invest

Question 4

Moreover, why might not all investment be successful in improving supply?

Answer 4

it may not achieve its aim or it may not be aimed at increasing supply