A system of private property rights
A. encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
B. reduces the efficiency of government, which reduces the growth rate of the economy over time.
C. discourages economic growth by discouraging the development of new ideas and ways of doing things.
D. encourages economic growth by creating incentives to invest in capital and to be innovative.
Answer: D
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To determine real GDP, divide nominal GDP by the
a. current values of goods and services. b. final goods and services. c. GDP deflator. d. value of GDP.
The short-run break-even price
A. occurs at the output at which the firm yields a below normal rate of return. B. occurs at the output at which the firm yields a positive economic profit. C. is the price at which the firm's current liabilities are paid off. D. is the price at which a firm's total revenues equal total costs.
A temporary increase in government purchases in the classical model would
A. shift the marginal product of labor curve to the left. B. shift the labor supply curve to the right. C. shift the production function to the right. D. shift the labor demand curve to the right.
Refer to the diagram, representing Slippery Slope Oil Company. What price of oil would make 15 million barrels the optimal quantity to extract and sell this year?
A. $50.
B. $70.
C. $90.
D. $110.