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Economic Impact of Infrastructure Projects

Question

Discuss whether or not infrastructure projects will benefit the economy.

Category:

Economic Growth and Development

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Preview Answer

I. 🍃Introduction
- Brief explanation of the topic
- Purpose of the outline

II. Reasons why infrastructure projects might have positive effects
- Direct employment opportunities
- Reduction in firms' production costs
- Example of increasing profits, output, and employment
- Encouragement of investment
- Increase in total demand
- Creation of external economies of scale
- Attraction of MNCs to the country

III. Reasons why infrastructure projects might have negative effects
- High cost of infrastructure projects
- Need to raise taxes or borrow large amounts
- Opportunity costs
- External costs such as pollution and habitat destruction
- Risk of inflation due to increased government spending
- Short run costs such as congestion, but long run benefits such as faster travel times

IV. 👉Conclusion
- Summary of the positive and negative effects of infrastructure projects
- Importance of considering both sides when making decisions about infrastructure projects.

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