Ruritania's Ministry of Economics has considered various plans to stimulate economic growth in the kingdom.

Which proposal would have the best chance of success?
a. To enhance efficiency and minimize the size of the private sector, require private firms to enter into partnerships whereby ownership of firms is split equally between the government and private owners.
b. To increase the general level of skills in the labor force, subsidize tuition to enable more people to attend college.
c. To reduce risk and encourage entrepreneurship, require the government to take control of and operate any businesses that do not earn a profit for two consecutive years, including providing salaries for the workers and managers equal to the average for that industry plus 10%.
d. To lower unemployment by discouraging layoffs, require businesses to continue paying the salary of any worker who loses his or her job until he or she finds a new one.

Which source of productivity growth does the best proposal directly influence?
a. income equality
b. physical capital
c. technology
d. human capital

Human capital refers to the accumulated skills and knowledge of a workforce. Workers can use education and experience to increase their human capital, and in doing so, increase their productivity. Economies grow when the labor force becomes more productive.

A plan to subsidize tuition to enable more people to attend college will lead to higher levels of human capital, thereby stimulating economic growth.

The remaining plans would have a negative impact on economic growth and are therefore incorrect.