Does the political freedom existing in democracies always aid economic growth?
It is claimed that economic growth stimulates political freedom or democracy, but evidence for that correlation is far from conclusive. Some features of democracy, such as majority voting and special interest groups, may also be growth retarding. For instance, if the majority decides to vote for large land reform measures and wealth transfers, the consequences will be higher taxes and market distortions, which will reduce incentives for work, investment and ultimately economic growth.
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Assume the market shares of the six largest firms in an industry are 15 percent each. The six-firm concentration ratio would indicate that the industry is highly concentrated, while the Herfindahl- Hirschman Index would not
Indicate whether the statement is true or false
The relationship between the marginal propensity to consume and the marginal propensity to save is such that
a. MPC – MPS = 0. b. MPC + MPS = 1. c. MPC – MPS = 1. d. MPC = 1/MPS.
An example of a trade-off is
a. giving up going to a movie to spend time shopping b. giving up going to a movie because it got bad reviews c. going to a movie to see your favorite movie star d. not going to a movie because your wife isn't feeling well
The diagram in panel b (graph) is an example of
A. a demand curve B. the substitution effect C. the income effect D. a demand schedule