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O Levels Economics (2281)•2281/12/M/J/24
Question 25 from 2281/12/M/J/24

Explanation

Education fuels faster economic growth

Steps:

  • Identify that economic development measures growth in GDP, productivity, and living standards over time.
  • Recall that human capital—skills and knowledge from education—boosts innovation and efficiency, accelerating development.
  • Compare options: Higher education spending in X likely builds better workforce, explaining faster progress.
  • Eliminate distractors: Unemployment, reverse investment, and healthcare don't directly drive development rates.

Why A is correct:

  • Education spending enhances human capital, a key factor in endogenous growth theory, where knowledge accumulation increases long-term GDP growth.

Why the others are wrong:

  • B: Higher unemployment in X reduces productivity and growth, contradicting faster development.
  • C: Higher investment in Y should promote Y's growth more, not X's advantage.
  • D: Healthcare improves health but doesn't directly spur economic development like education does.

Final answer: A

Topic: Differences in economic development between countries

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