If the political leaders of a country wanted to promote economic growth,which of the following policy alternatives would be most effective?
A)price controls in order to keep the price of food low
B)expansionary monetary policies designed to increase the rate of inflation
C)increasing marginal tax rates in order to increase government subsidies and transfers
D)elimination of price controls and trade restraints and establishment of a monetary policy consistent with long-run price stability (a low rate of inflation)

Question

Quizplus · Accepted Answer

Elimination of price controls and trade restraints can lead to increased competition and efficiency in the market, which can promote economic growth. In addition, establishing a monetary policy consistent with long-run price stability can help to maintain a stable and predictable economic environment, which can encourage investment and growth. The other options (A, B, and C) may have short-term benefits but are unlikely to lead to sustained economic growth in the long term.

If the Political Leaders of a Country Wanted to Promote