Every country has problems in the economy, so governments always try to find effective solutions that can lead to a better economy. One of the best solutions is creating a catalytic investment climate in the local economy, which can lead to: create more jobs, increase GDP and lower the prices of goods.
Creating a catalytic investment climate means that the government makes the investment in this country effective and attractive. How? The most effective way is lowering the taxes which is the big impediment for the investors. To explain more, investors always prefer low taxes because the taxes reduce their annual profit. If the government lowers the percentage that the investors must pay as a tax, the investors are going to invest in this country and cause the following effects.
The most important effect of having more investments is creating more jobs in the local economy. Making the investment easier and sacrificing a part of income (taxes) to have more jobs is a current solution in many economies. How can this solution work? The foreign investors, even the local investors will be attracted to invest in this country, so employing a number of the population is a requirement of beginning the project. That means more jobs will be created by the new investments in this country and this is the benefit that every country is looking for.
As a result of increasing the investment in the local economy, the number of GDP will be grown. GDP (Gross Domestic Product) is the standard to know how much the economy is powerful and how much the economy is being developed. Having more investments increases and develops the production in the local economy, which means more products will be made and more bargains will be dealt. For example, the new investment will deal with the current investments or companies because the new investment needs some materials to begin production. Increasing GDP is the target that every country wants to achieve.
The sensible effect of having more investment is lowering the prices of goods. The relationship between price and supply is clear and it means if the supply increases (supply is the number of goods that the sellers want to sell), the price will decrease. The new investing provides the markets with a big number of products. Consequently, the sellers will sell in a lower price because of the big number of products. This consequence is sensible and beneficial for people in this country.
In sum, making the investment easier and paying for that is a value solution that can lead to positive effects. The three important positive effects are creating more jobs, increase GDP and lowering the prices.
