Lisavia Case Study

The purpose of this paper is to present various ways in which the President of Lisavia can increase productivity. As we have noticed, increasing the countries productivity will improve the country’s economy as a whole. The first thing that the President should focus on is improving and investing in the country’s Physical Capital. Secondly, the President should focus on investing in technological advancements. Lastly, the country can improve the country’s productivity by promoting more international investments of the Country.

Improving Physical Capital should by a primordial advancement that the President of Lisavia should invest in. If the President was to raise the citizens tax by as little as 1%, the country can use this 1% increase the

The Country should be the main promoter of these advancements in technology, may it be for the use of the manufacturing companies or for the private use, such as medicines. The Country of Lisavia can help promote these advancements by supplying subsidies to the technology firms in order to continue their growing research. Also, firms that invest into these same firms can receive certain tax breaks, because they are helping the overall growth of the economy. Another way that the government can promote growth in technology is by allowing Patents to be extended for a certain period of time, for any new inventions. If the firms that are working with these patents and creating these new advancements can produce some form of proof that they’re product is working efficiently, then the government can allow for low interest loans. The loans that are given to these firms or individuals should not have a payback interest above 3%. Again, this would allow more individuals to come forth and want to participate in these firms without worrying about the financial burden that they might

By helping Physical capital to grow, the country now has the flexibility to be able to produce more roads, train tracks and airports, all things necessary for transportation. If the country can improve the form of transportation, then investors will be more likely to be interested in supplying or creating firms in the country. Firms that are interested in establishing themselves in Lisavia should be regarded with high importance. The government can supply these beginning firms with low cost land where they can begin building their factories. Most of the land that isn’t being used is wasting away anyways so by allowing these firms to use them at a low cost will create positive externalities. These firms should also receive certain tax breaks just for bringing their firms from over sees and creating more jobs for the citizens. The firms that have high numbers of employees should be given bigger tax breaks because they are spending more money and creating more jobs. These firms can also take advantage of the afore mentioned Physical Capital investment