A system of property rights
A) encourages economic growth by creating incentives to invest in capital and to be innovative.
B) discourages economic growth by discouraging the development of new ideas and ways of doing things.
C) reduces the efficiency of government, which reduces the growth rate of the economy over time.
D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
A
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The relationship between real GDP and potential GDP is that
A) real GDP always equals potential GDP. B) real GDP never equals potential GDP. C) real GDP fluctuates about potential GDP. D) real GDP is always below potential GDP.
Which of the following best defines an optimum currency area?
A) a group of nations sharing the same currency B) a group of regions in close proximity to each other. C) a group of regions who operate under similar economic policies. D) a group of regions with economies closely linked by factor mobility and by trade in goods and services E) a group of nations that engage in free trade with each other
The legislation that separated investment banking from commercial banking until its repeal in 1999 is known as the
A) National Bank Act of 1863. B) Federal Reserve Act of 1913. C) Glass-Steagall Act. D) McFadden Act.
According to the Taylor rule, what should the federal funds rate target be if inflation is 5%, the target rate of inflation is 2%, the equilibrium real federal funds rate is 2%,
full-employment real GDP is $9 trillion, and current real GDP is $8.55 trillion?