Which of the following best describes the relationship between economic freedom and the growth rate of real per capita Gross Domestic Product (GDP)?
A) Countries with less economic freedom tend to grow more rapidly than those that are more free.
B) There are too many extraneous factors involved to discern any relationship between the two.
C) Countries with more economic freedom tend to grow more rapidly than those that are less free.
D) Rich countries that are economically free generally grow rapidly, but there is no evidence that economic freedom helps low-income countries.
C) Countries with more economic freedom tend to grow more rapidly than those that are less free.
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Arthur is an unskilled worker who is currently unemployed. He has been offered a job that pays $40 a day, but he is currently receiving unemployment insurance benefits equal to $50 a day, so he chooses not to accept the job and to continue looking for a better job. Arthur is ________ unemployed.
A. cyclically B. structurally C. not D. frictionally
If a nation's currency depreciates, this will tend to
a. shift a nation's balance of trade toward a deficit. b. cause a deficit in the government's budget (expenditures - revenues). c. make foreign goods more expensive for the nation's citizens. d. make foreign goods cheaper for the nation's citizens.
Suppose the U.S. government imposes a requirement that all passenger cars achieve a minimum fuel economy of 25 miles per gallon combined fuel efficiency. What impact would this have on the price of gasoline? What impact do you think this would have on deaths from traffic accidents?
What will be an ideal response?
An important advantage of a fixed-exchange-rate system is that it
A. promotes the growth of international trade and international financial transactions, by reducing the risk to market participants that exchange rates will change unexpectedly and substantially. B. prevents an exchange rate from becoming overvalued. C. protects the domestic economy from being hit by foreign shocks. D. prevents an exchange rate from becoming undervalued.