Directions: The critical reasoning question is based on a short argument, a set of statements, or a plan of action. For each question, select the best answer of the choices given and explain why the chosen answer is the right fit.

Statement: There appear to be positive spillover effects from universities to geographically close neighbouring regions. We show that the relationship between GDP per capita and universities is not simply driven by the direct expenditures of the university, its staff and students. Part of the effect of universities on growth is mediated through an increased supply of human capital and greater innovation.

Which of the following statements strengthen the fact that universities have a positive impact on the country’s economy?

I: Universities arrange a lot of cultural activities, which is in turn used for the good of the government.

II: Our estimates imply that a 10% increase in a region's number of universities per capita is associated with 0.4% higher future GDP per capita in that region.

III: A country's economy becomes more productive as the proportion of educated workers increases since educated workers can more efficiently carry out tasks that require literacy and critical thinking.