(I) A monetary policy that results in price stability will encourage the realization of gains from trade and thereby help promote economic growth.
(II) High tariffs and restrictive quotas will encourage rapid economic growth.
A) I is true; II is false.
B) II is true; I is false.
C) Both I and II are true.
D) Both I and II are false.

Question

(I)  A monetary policy that results in price stability will encourage the realization of gains from trade and thereby help promote economic growth.
(II)  High tariffs and restrictive quotas will encourage rapid economic growth.
A) I is true; II is false.
B) II is true; I is false.
C) Both I and II are true.
D) Both I and II are false.

Quizplus · Accepted Answer

I is true because price stability is important for businesses and consumers to make informed decisions in the marketplace, leading to more efficient allocation of resources and overall economic growth.
However, II is false because high tariffs and restrictive quotas limit international trade, which can actually harm economic growth by reducing the efficiency gains from trade and limiting market access for domestic producers.

(I) a Monetary Policy That Results in Price Stability Will Encourage