2022 IB Diploma Extended Essays

Figure 10. Impact of Lower HIV Prevalence on an Economy

From an economic perspective, governments should invest in healthcare, not only for the benefit of reducing HIV prevalence, but for the economic payoff. A high standard of health implies a reduction of HIV prevalence. Therefore, labour productivity increases as a higher standard of health increases the labour force, defined as the total population of people willing and able to work in a given period of time (Piabuo, 2017). As shown in figure 10, the increase of labour productivity is represented by the rightward shift of the aggregate supply curve from AS1 to AS2. This represents the increase of the supply of labourers in an economy. Moreover, AS2 creates a new market equilibrium in respect to aggregate demand. This results in a decrease in inflation shown by the change of the average price level from P1 to P2, and an increase in economic efficiency represented by the increase of real GDP from Y1 to

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