Explain the role of economic freedom in economic development
What will be an ideal response?
Economic freedom is a measurement of the extent to which one can pursue economic activity without interference from government. Economic freedom is based upon personal choice, voluntary exchange, and the security of property rights. Economic freedom stimulates economic growth when the markets are competitive. Greater economic freedom encourages investment, which in turn, creates jobs and economic growth.
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Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) contractionary fiscal policy. B) expansionary monetary policy. C) expansionary fiscal policy. D) expansionary automatic stabilizers. E) contractionary monetary policy.
When "stagflation" occurs
A) the economy experiences higher inflation rates and lower unemployment rates at the same time. B) the economy experiences lower inflation rates and higher unemployment rates at the same time. C) the economy experiences lower inflation rates and lower unemployment rates at the same time. D) the economy experiences higher inflation rates and higher unemployment rates at the same time.
If a firm anticipates that it is at a risk of being held up, it is more likely to
a. forgo the transaction completely b. merge with its trading partner c. exchange "hostages" d. All the above
Which of the following is not a major trading partner of the U.S.?
A. Canada B. Mexico C. Russia D. China