Which of the following statements is true of the Europeans in the period of colonization?
A) Europeans set up extractive economic institutions in all areas.
B) Europeans set up relatively extractive economic institutions in areas that had greater population densities.
C) Europeans set up relatively inclusive economic institutions in areas that had greater population densities.
D) Europeans set up inclusive economic institutions in all areas.
B
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What is the relationship over the business cycle of potential GDP and real GDP?
What will be an ideal response?
The arguments against the use of active stabilization policy include all of the following except:
a. the responsiveness of voluntary unemployment to changes in GDP. b. the existence of policy lags. c. weak macroeconomic forecasting abilities. d. the possibility of policy errors because of limited information.
If the market price of a good does NOT include all of the costs and benefits that arise from the production or consumption of the good, then
A) the market is perfectly competitive. B) an externality is present. C) society is consuming and producing the optimal amount of the good. D) resources are properly allocated.
Explain how the recession of 2007–2009 in the United States provides an example of a recessionary expenditure gap.
What will be an ideal response?