Asked by Jessica Leigh on Jun 29, 2024
Verified
Long-term growth in production in an economy can be partially explained by:
A) improvements in the rules of the game that facilitate production and exchange.
B) the peaks and troughs of the business cycle or economic fluctuations.
C) trade surpluses that lead to accumulations of precious metals.
D) federal government budget deficits.
E) a gradual but consistent increase in the price level.
Long-term Growth
The sustained increase in the economic output of a country or region over a significant period.
Rules Of Game
The set of guidelines and principles that determine how a particular game or activity is conducted.
Business Cycle
The fluctuation in economic activity that an economy experiences over a period of time, marked by phases of expansion and contraction.
- Understand the mechanisms behind economic expansion, including elements that facilitate and impede it.
Verified Answer
RR
Roveena RobinsonJul 06, 2024
Final Answer :
A
Explanation :
Improvements in the rules of the game that facilitate production and exchange, such as better property rights protection, contract enforcement, and the reduction of transaction costs, can lead to increases in productivity and innovation, which in turn drive long-term economic growth. The other options (B, C, D, and E) are not associated with sustained long-term growth.
Learning Objectives
- Understand the mechanisms behind economic expansion, including elements that facilitate and impede it.
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