(I) Governments that respect property rights and freedom of exchange while following monetary (and fiscal) policies consistent with relative price stability, establish the foundation for economic growth.
(II) Governments have often diminished the economic prospects of a nation by levying high taxes, instituting price controls, and following inflationary monetary policies.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

Question

(I)  Governments that respect property rights and freedom of exchange while following monetary (and fiscal) policies consistent with relative price stability, establish the foundation for economic growth.
(II)  Governments have often diminished the economic prospects of a nation by levying high taxes, instituting price controls, and following inflationary monetary policies.
A) I is true; II is false.
B) I is false; II is true.
C) Both I and II are true.
D) Both I and II are false.

Quizplus · Accepted Answer

Both statements are true. Government policies that respect property rights and freedom of exchange while maintaining relative price stability can provide a favorable environment for economic growth. Conversely, high taxes, price controls, and inflationary monetary policies can hinder economic growth.

(I) Governments That Respect Property Rights and Freedom of Exchange While