Which of the following is considered a key economic influence on the capacity of market economies to promote unprecedented growth?
A) political changes
B) religious beliefs
C) historical accidents
D) free competition
Answer: D) free competition
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Potential GDP
A) might either increase or decrease as the price level increases, depending on whether aggregate demand increases or decreases. B) decreases as the price level increases because people demand fewer goods and services. C) is independent of the price level. D) increases as the price level increases because firms supply more goods and services. E) never changes.
Pareto's Principle states that:
a. 20 percent of the time expended produces 80 percent of the results b. 90 percent of the time spent produces 10 percent of the results c. 75 percent of time is wasted d. A task or job fills the time available
Assume the Fed purchases $5,000 worth of U.S. Treasury bonds from Bill Gates, who promptly deposits the money in Microsoft Rules National Bank. Assuming that the required reserve ratio is 25 percent and banks keep zero excess reserves, then the money supply will ultimately:
a. increase by a maximum of $5,000. b. increase by a maximum of $20,000. c. decrease by a maximum of $5,000. d. decrease by a maximum of $20,000.
The numerical value of a price elasticity represents the percentage amount by which the quantity demanded changes when the price
a. increases by 1 unit b. changes by 1 percent c. is in equilibrium d. is fixed in the market e. falls by 1 dollar