Deck 17: Institutions, Policies, and Cross-Country Differences in Income and Growth

Question 1

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

A) grow more rapidly, but experience higher poverty rates.
B) achieve higher income levels per person but experience higher poverty rates.
C) grow more rapidly and achieve larger poverty rate reductions.
D) experience less rapid rates of economic growth and higher overall poverty rates.

Answer 1

grow more rapidly and achieve larger poverty rate reductions.

Question 2

The per capita incomes of countries in the quartile with the most economic freedom during 2013 were

A) slightly lower than those of the quartile of countries with the least economic freedom.
B) about the same as the quartile of countries with the least economic freedom.
C) about twice those of the countries with the least economic freedom.
D) about sixtimes those of the quartile of countries with the least economic freedom.

Answer 2

about sixtimes those of the quartile of countries with the least economic freedom.

Question 3

Government policies that heavily tax some activities while subsidizing others and that fix or control interest rates will result in

A) higher productivity of investment.
B) lower productivity of investment.
C) no change in the productivity of investment.
D) a greater level of investment.

Answer 3

lower productivity of investment.

Question 4

High income countries with larger governments as a share of GDP have generally

A) grown less rapidly than their counterparts with smaller governments.
B) experienced less deadweight losses resulting from taxes and/or government borrowing.
C) seen the government decrease in size as real GDP rises.
D) been able to be more economically efficient.

Question 5

Compared to countries with less economic freedom, countries with more economic freedom

A) achieve higher per person income  levels, but they also have higher poverty rates.
B) grow more rapidly, but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies.
C) achieve both higher  income levels per person and lower rates of poverty.
D) grow less rapidly and experience higher poverty rates.

Question 6

(I)  Countries with more economic freedom during the past quarter of a century had a lower average per capita GDP.
(II)  Countries with more economic freedom during the past quarter of a century generally achieved higher rates of economic growth.

A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Question 7

Compared to those with less economic freedom, countries with more economic freedom generally have ____ per capita GDP levels and ____ growth rates. (Fill in the blanks)

A) lower; less rapid
B) lower; more rapid
C) higher; less rapid
D) higher; more rapid

Question 8

On average, countries that have a larger degree of economic freedom tend to have

A) higher per capita income levels, but slower rates of economic growth, than countries with less economic freedom.
B) lower per capita income levels, but more rapid rates of economic growth, than countries with less economic freedom.
C) both higher per capita income levels and more rapid growth rates than countries with less economic freedom.
D) both lower income levels and slower growth rates than countries with less economic freedom.

Question 9

During 1980-2013, the developing countries that moved most rapidly toward  economic freedom

A) achieved higher rates of economic growth, but the reductions in their poverty rates were smaller than those for countries that were less free.
B) grew less rapidly, but the reductions in the poverty rates were greater than those achieved in countries that were less free.
C) experienced both slower rates of economic growth and smaller reductions in poverty  rates than countries that were less free.
D) experienced both more rapid rates of economic growth and larger reductions in poverty  rates than countries that were less free.

Question 10

Countries with more economic freedom have levels of economic growth that

A) are generally higher than those of nations with less economic freedom.
B) are similar to those of nations with less economic freedom since the level of investment, not economic freedom, determines the growth rate.
C) cannot continue at high levels because too little government planning is being done.
D) are generally lower than the growth rates of countries with less economic freedom.

Question 11

Which of the following would be most likely to improve the standard of living of a less-developed country?

A) Development of strong labor unions.
B) More foreign investment, attracted by the expectation of economic and political stability.
C) Adoption of trade barriers (higher tariffs and quotas).
D) Widespread use of price controls to allocate goods and resources.

Question 12

Countries with lower levels of economic freedom tend to have

A) lower levels of economic growth
B) higher levels of per person income
C) higher levels of investment
D) all of the above

Question 13

Dividing data into quartiles means that you are dividing data into

A) two groups.
B) three groups.
C) four groups.
D) twenty-five groups.

Question 14

Other things constant, countries that invest more will grow

A) more rapidly.
B) less rapidly.
C) at the same rate.
D) at exactly 2% per year.

Question 15

Private investment as a share of the economy tends to be higher in countries

A) with low levels of economic freedom.
B) with high levels of economic freedom.
C) with economic freedom ratings near zero.
D) that have experienced a sharp reduction in economic freedom during the most recent decade.

Question 16

Countries with more economic freedom tend to invest a ____ share of their GDP and the productivity of that investment is ____ than for countries that are less free. (Fill in the blanks)

A) larger; higher
B) larger; lower
C) smaller; higher
D) smaller; lower

Question 17

Countries with more economic freedom during 1990-2013 tended to

A) grow more rapidly, but the 2013 income levels of the freer economies were still lower than those that were less free.
B) achieve higher levels of income but the growth rates of the less free economies have been more rapid in recent years.
C) achieve both more rapid growth and higher income levels than those that were less free.
D) grow less rapidly and the 2013 income levels of the freer economies were lower than those that were less free.

Question 18

The income per person in the quartile of countries with the most economic freedom was approximately ____ times the figure for the least free group of countries.

A) 2
B) 4
C) 6
D) 12

Question 19

Which of the following provides the fuel for growth and achievement of high income levels?

A) Gains from trade
B) Entrepreneurial discovery
C) Capital formation
D) All of the above

Question 20

When considering the impact of institutions and policies on economic performance, it is most important to focus on

A) long-term economic growth.
B) short-term economic growth.
C) business cycle fluctuations.
D) the labor force participation rate of married women.

Question 21

In 1980, the world's extreme poverty rate was 50.9 percent. By 2013, this figure

A) had increased to more than 70 percent.
B) was virtually unchanged.
C) had declined to approximately 40 percent.
D) had declined to less than 15 percent.

Question 22

If the 1980 extreme and moderate poverty rates of the world were present today, there would be

A) no change in the number of people classified as poor, because the world's extreme and moderate poverty rates are virtually the same today as in 1980.
B) approximately one billion more people living in extreme poverty today, but no change in the number living in moderate poverty.
C) approximately 2 billion more people living in both extreme and moderate poverty today.
D) approximately 1 billion fewer people living in both extreme and moderate poverty today.

Question 23

During the 2000-2009 decade,

A) the economic freedom  rating of the United States fell, but the growth rate of real GDP was more rapid than in recent decades.
B) the economic freedom rating of the United States increased and the growth  of real GDP was more rapid than that of recent decades.
C) the economic freedom rating of the United States fell and the growth of real GDP was less rapid than that of recent decades.
D) the economic freedom rating of the United States increased but the growth of real GDP was less rapid than that of recent decades.

Question 24

During 1985-2013, on average, low-income less developed countries

A) adopted more restrictive trade policies and followed more inflationary monetary policies.
B) adopted more liberal trade policies but their monetary policies were more inflationary.
C) adopted more liberal trade policies and followed monetary policies more consistent with price stability.
D) adopted more restrictive trade policies, but their monetary policies were more consistent with price stability.

Question 25

The world bank classifies persons with incomes of less than $3.10 per day (measured in 2011 international dollars) as living in moderate poverty. Between 1980 and 2013, the moderate poverty rate of the world

A) increased from 50 percent to almost 70 percent.
B) increased from 30 percent to almost 50 percent.
C) decreased from 67 percent to 31 percent.
D) was virtually unchanged during this 33 year period.

Question 26

Which of the following helps low income countries grow rapidly relative to high income countries?

A) Low income countries are in a better position to save a larger share of their income.
B) Low income countries can copy (or borrow at a low cost) technologies and practices that have been successful in high income countries.
C) Low income countries generally have legal systems that protect property rights and enforce contracts in a more evenhanded manner.
D) Low income countries generally have more favorable weather

Question 27

According to the Economic Freedom of the World data, the United States

A) is now the freest economy in the world.
B) is the world's third freest economy, behind only Hong Kong and Singapore.
C) has experienced a decline in economic freedom since 2000, and it no longer ranks in the top ten of the world's freest economies.
D) has experienced an increase in economic freedom since 2000 and it is now the world's 8th freest economy.

Question 28

Which of the following most accurately states the importance of technology as a source of economic growth for less-developed countries?

A) Restraints imposed by the slow advancements in modern technology have severely constrained the growth of less-developed countries.
B) If modern technology was the only requirement for economic growth, less-developed countries would be growing rapidly.
C) Most less-developed nations have the necessary complementary factors of production to make good use of modern technology if they could just afford the complex machines.
D) While modern technology has increased the income levels in less developed countries, it has been unable to improve living standards.

Question 29

A less-developed nation will be able to benefit substantially by adopting the technologies and the business practices that have been successful in other nations, but only if

A) its wages are low enough.
B) its population is large enough.
C) it first educates its citizens well, so they can use the new ideas.
D) it improves its institutions so that investors are willing to import the capital and any expertise needed to take advantage of the advanced production techniques that are available.

Question 30

The economic freedom of the world data indicate that during 1985-2013, economic freedom in less developed countries

A) declined and the economic freedom gap compared with high-income developed countries expanded.
B) increased, but the economic freedom gap compared with high-income developed countries widened because economic freedom rose by an even larger amount in high-income countries.
C) declined but the economic freedom gap compared with high-income developed countries narrowed because there was an even larger decline in economic freedom in high-income countries.
D) increased, and the economic freedom gap compared with high-income developed countries narrowed.

Question 31

When a low-income nation improves its institutions, so that growth results, one reason the growth may be more rapid than would result from a similar improvement in a developed nation that brings the same amount of added capital per worker to each nation, is that

A) adding capital has constant returns to scale, rather than diminishing returns, in each nation.
B) with diminishing returns to scale, and with richer nations starting with more capital per unit labor, the added capital produces smaller increments to production in the higher-income nations.
C) wage rates are lower in the low-income nation, and lower-income workers are more productive.
D) capital is always more productive in lower-income nations.

Question 32

Which of the following is true of modern technology?

A) Improvements in technology have propelled the production possibilities and living standards of people in North America, Western Europe, and several other parts of the world.
B) In low-income countries, proven technologies can be either emulated or imported at a low cost.
C) Often, perverse institutions and policies in low-income countries undermine the gains from improvements in technology.
D) All of the above.

Question 33

Which of the following is true of technology?

A) Technological improvements are less important today than was true in the past.
B) Lack of access to modern technology is a major barrier restraining the growth of low-income countries.
C) Often, perverse institutions and policies in low-income countries undermine the potential gains from adoption of modern technology.
D) Countries with high investment rates will be unable to apply modern technology effectively.

Question 34

The economic freedom of the world data indicate that during the past three decades, low-income developing economies have

A) moved toward more restrictive trade policies and followed monetary policies that were more inflationary.
B) moved toward more restrictive trade policies, but their monetary policies were less inflationary.
C) reduced trade restrictions, but followed more inflationary monetary policies.
D) reduced trade restrictions and followed monetary policies more consistent with price stability.

Question 35

The Economic Freedom of the World measure indicates that the United States

A) was the freest economy in the world in 2010.
B) has experienced a decline in economic  freedom since 2000.
C) has experienced an increase in economic freedom since 2000.
D) continues to be substantially more free than Australia, Canada, and Chile.

Question 36

Which of the following provides the best explanation of why low-income countries generally remain poor?

A) Their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange.
B) They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates.
C) They are poorly endowed with natural resources, which are essential for long-term rapid growth.
D) When the average income level is low, workers have little incentive to earn higher incomes.

Question 37

During the past three decades, the economic freedom gap between the high-income developed countries and low-income less developed countries has _______  and the world poverty rate has ______. (Fill in the blanks)

A) widened; increased
B) narrowed; declined
C) narrowed; increased
D) widened; declined

Question 38

Private ownership and competitive markets are important for economic growth because they provide individuals with a strong incentive to

A) care for resources and use them beneficially.
B) innovate and introduce new products that are highly valued relative to their cost.
C) produce goods efficiently.
D) all of the above are correct.

Question 39

According to the Economic Freedom of the World data, the United States

A) is the world's third freest economy, behind only Hong Kong and Singapore.
B) has experienced an increase in economic freedom during the past decade and it once again ranks among the world's ten freest economies.
C) has experienced a sharp decline in economic freedom since 1990, and it no longer ranks among the world's top 50 freest economies.
D) has experienced a decline in economic freedom in recent years and it now ranks behind several high-income industrial countries including Switzerland, New Zealand, and Canada.

Question 40

The rapid growth rates of less developed countries (LDCs) after adopting institutions and policies more favorable to economic freedom and voluntary exchange is not surprising when one considers that

A) LDCs can emulate and borrow successful practices and technologies from other, more developed nations.
B) foreign aid payments to a less developed country are nearly always expanded rapidly when the country begins to increase its income level.
C) the governments of LDCs play a larger role in economic planning, when economic freedom rises.
D) economic theory indicates that improvements in institutions normally result from economic growth, rather than growth stemming from better institutions.

Question 41

Which of the following about economic growth is true?

A) The rich countries are consistently getting richer, while the poor countries are getting poorer.
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2014 period.
C) The growth picture of LDCs is clearly one of diversity; some LDCs are growing rapidly, while others continue to stagnate.
D) The fastest growing countries in the world are all high-income industrial economies.

Question 42

One-third of the world's population live in China and India. How did the growth rate of these two countries compare with the growth of high income industrial countries during 1980-2014?

A) Per capita GDP increased less rapidly in China and India than in the high income industrial countries.
B) Per capita GDP increased more rapidly in China and India than in the high income industrial countries.
C) China grew more rapidly than the high income industrial countries, but India grew less rapidly.
D) India grew more rapidly than the high income industrial countries, but China grew less.

Question 43

During the past three decades, the economic freedom gap between high and low income countries has _______ and per capita income has grown ______ in high income than low income countries. (Fill in the two blanks)

A) widened; less rapidly
B) widened; more rapidly
C) narrowed; more rapidly
D) narrowed; less rapidly

Question 44

Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on

A) competitive elections and political democracy.
B) the presence of institutions and policies consistent with economic freedom.
C) the use of tariffs and quotas to protect domestic businesses from competition with foreigners.
D) the use of government planning to direct investments into worthwhile projects.

Question 45

Which of the following is true regarding the growth record of less-developed countries (LDC's) during the past quarter of a century?

A) Some are among the fastest growing countries in the world.
B) Some are among the slowest growing countries in the world.
C) Some countries have experienced declining per capita income levels.
D) All of the above are true.

Question 46

The Economic Freedom of the World index is a measure of the consistency of a nation's institutions and policies with

A) political democracy.
B) economic freedom.
C) an Egalitarian distribution of income.
D) economic nationalism.

Question 47

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

A) The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980.
B) None of the LDCs have been able to match the per capita income growth rate of the United States.
C) During the last two decades, the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more) have been LDCs.
D) Both a and c are correct.
E) All of the above are correct.

Question 48

The adoption of modern technologies and business methods have the possibility to improve economic performance in a nation with low per capita income and low growth, but only if

A) its natural resources are sufficient.
B) its workers become educated rapidly enough.
C) it improves its institutions, making them sound enough to attract capital and entrepreneurial activity.
D) its government has enough skilled planners to properly deploy new capital.

Question 49

During 1980-2014, the per-capita incomes of less-developed countries (LDCs)

A) grew rapidly.
B) declined.
C) were virtually unchanged.
D) registered a mixed growth record; some grew rapidly while others stagnated.

Question 50

Which of the following about economic growth is true?

A) The developed nations are growing rapidly and the less-developed nations are stagnating.
B) Most of the countries that have achieved the highest growth rates in the world during the last quarter of a century were classified as LDCs in 1980.
C) It is an oversimplification to divide the world into the growing, developed nations and the stagnating, less-developed nations.
D) Both b and c are true.
E) All of the above are true.

Question 51

Regarding economic growth, which of the following is true?

A) In recent decades, the rich countries of the world have consistently grown more rapidly than poor countries.
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2005 period.
C) During recent decades, most LDCs have stagnated economically.
D) During 1980 through 2005, the fastest growing countries in the world were mostly LDCs.

Question 52

During 1980 through 2014,

A) the per capita income of high-income industrial countries declined.
B) the fastest growing economies in the world were LDCs.
C) almost all LDCs grew more rapidly than the high-income industrial economies.
D) most of the countries with rapid growth rates during the last two decades were located in South America.

Question 53

How did the world's per capita income and the degree of income inequality change between 1800 and  1980?

A) Per capita income expanded by approximately tenfold and income inequality increased.
B) Per capita income expanded by approximately tenfold and income inequality declined.
C) The per capita income of the world was virtually unchanged and income inequality declined.
D) The per capita income of the world declined, but the income was distributed more equally.

Question 54

Which of the following about economic growth is true?

A) The fastest growing economies in the world (those with annual real growth rates of 3.5 percent or more) are mostly less developed countries.
B) The fastest growing economies in the world are mostly high-income industrial countries.
C) The slowest growing countries in the world, many of which are experiencing declines in per capita GDP, are less developed countries.
D) Both a and c are true.

Question 55

Since 1980, economic freedom has increased  _______  in less developed countries than in high-income developed nations and the per capita income of less developed countries has grown  _____ than in the high-income developed countries. (Fill in the blanks)

A) more; more rapidly
B) more; less rapidly
C) less; more rapidly
D) less; less rapidly

Question 56

What has happened to income inequality and the poverty rate of the world since 1980?

A) Both income inequality and the poverty rate have increased.
B) Both income inequality and the poverty rate have declined.
C) Income inequality has increased, but the poverty rate has declined.
D) Income inequality has declined, but the poverty rate has increased.

Question 57

What has happened to per capita income and the degree of income inequality of the world during the past three decades?

A) The rich countries have gotten richer and the poor countries poorer.
B) Per capita income has increased in both rich and poor countries, but the worldwide distribution of Income has become less equal.
C) Per capita income has declined in both rich and poor countries, and the worldwide distribution of income has become more equal.
D) Per capita income has increased in both rich and poor countries, and the worldwide distribution of income has become more equal.

Question 58

According to data on GDP growth between 1980 and 2014,

A) poor nations stagnated, while the rich nations continued to grow.
B) poor nations grew rapidly, while the rich nations stagnated.
C) most of the world's rapidly growing countries were located in Africa.
D) many poor nations grew more rapidly than wealthy nations, while others continued to stagnate.

Question 59

In order to achieve a high rating on the Economic Freedom of the World index, a country must

A) provide for the even-handed protection of private property and rely primarily on open markets and voluntary exchange to coordinate economic activity.
B) use central planning to direct investment and resolve the three basic economic problems of what, how, and for whom goods will be produced.
C) protect domestic businesses from foreign rivals who generally provide shoddy products.
D) protect domestic workers from businesses that are unwilling to pay high wages and provide quality working conditions.

Question 60

Some low-income countries generally remain poor because

A) their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange.
B) they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates.
C) they are poorly endowed with natural resources, which are essential for long-term growth.
D) when the average income level is low, workers have little incentive to earn higher incomes.

Question 61

Which of the following will increase economic freedom?

A) An increase in tariff rates imposed on imported goods.
B) An increase in government spending as a share of the economy.
C) Elimination of regulations that make it difficult to start a business.
D) An increase in the rate of inflation and its variability.

Question 62

Which of the following is a key characteristic of economic freedom?

A) Subsidies and regulations that favor business.
B) Central planning.
C) Reliance on open markets.
D) Import quotas that protect domestic businesses from rivals.

Question 63

The purchasing power parity (PPP) method

A) calculates the cost of purchasing a specific bundle of goods and services in each country and uses this measure to convert the incomes of different countries to a common currency.
B) calculates how much the general price level has increased within one specific country through time.
C) calculates how much the average standard of living across all countries has changed through time.
D) is used when one wants to compare dollar values from today with those from more than 100 years ago.

Question 64

Which of the following calculates the cost of purchasing a specific bundle of goods and services in each country and uses this measure to convert the incomes of different countries to a common currency so they may be more accurately compared?

A) The consumer price parity (CPP) method.
B) The purchasing power parity (PPP) method.
C) The GDP deflator exchange (GDPDE) method.
D) The inflation conversion factor (ICF) method.

Question 65

Which of the following countries have the highest per person income levels?

A) Argentina, Brazil, and Mexico
B) China and India
C) France and Germany
D) Ireland, Norway, and the United States

Question 66

Compared to high-income developed countries, the per person income levels of poorer less developed countries are somewhat understated because

A) the GDP figures omit the production within the household sector, which is generally larger in the high-income countries.
B) the GDP figures omit the production within the household sector, which is generally larger in the poorer countries.
C) the GDP figures omit net exports, which are generally larger in the high income countries.
D) the GDP figures omit net exports, which are generally larger in the poorer countries.

Question 67

Which of the following will increase economic freedom?

A) Subsidies and regulations that favor business.
B) High tariff rates.
C) High marginal tax rates.
D) Protection of persons and their property from aggression.

Question 68

Which of the following will increase economic freedom?

A) Low rates of inflation and easy access to money that maintains its purchasing power.
B) High tariff rates.
C) Government spending that comprises a large share of the economy.
D) Rapid and unpredictable inflation.

Question 69

Which of the following will increase economic freedom?

A) Institutions and policies supportive of voluntary exchange.
B) High tariff rates.
C) High taxes.
D) Rapid and unpredictable inflation.
E) All of the above.

Question 70

Which of the following is a key characteristic of economic freedom?

A) Institutions and policies supportive of voluntary exchange.
B) Freedom to compete.
C) Protection of people and their property from aggressors.
D) All of the above.

Question 71

In order to achieve high rates of economic growth countries must

A) hold free (democratic) elections
B) maintain a government expenditure/GDP ratio of at least 40 percent.
C) restrain the growth of government, keep taxes low, remove trade barriers, and follow a monetary policy consistent with price stability.
D) obtain financial aid from foreign governments in order to get the growth process started.

Question 72

Which of the following about economic freedom is true?

A) In 1960, the per capita income levels of Hong Kong and Singapore were greater than those of the United States and Canada.
B) The economies of Hong Kong and Singapore have grown slowly in recent decades.
C) Economic freedom ratings indicate that both Hong Kong and Singapore rank among the world's freest economies.
D) Economic freedom ratings indicate that Nigeria and Venezuela rank among the world's freest economies.

Question 73

Which of the following is true?

A) economic freedom is present if a country is a political democracy.
B) economic freedom ratings indicate the consistency of a nation's institutions and policies with personal choice, freedom of exchange, and protection of private property.
C) economies that are highly free tend to grow less rapidly than those with less economic freedom.
D) all of the above are correct.

Question 74

Which of the following will increase economic freedom?

A) Freedom to enter and compete in markets.
B) High tariff rates.
C) High taxes.
D) Rapid and unpredictable inflation.

Question 75

The GDP figures fail to count labor services and other household production. Once this omission is taken into account,

A) the income differences between the high and low income countries are small.
B) the differences in living standards between the high and low income countries are small.
C) the income differences between the high and low income countries are still huge.
D) the life expectancy in the high and low income countries is approximately the same.

Question 76

If a country is going to achieve a high economic freedom rating, it must

A) follow rule of law principles and create a stable monetary environment.
B) be a political democracy.
C) refrain from the imposition of barriers that limit voluntary exchange.
D) rely primarily on government expenditures and regulations (rather than markets) to allocate goods and resources.
E) both a and c are true.

Question 77

Income per person in the United States is approximately ____ that of Malawi, and Niger, two of the world's poorest countries.

A) the same as
B) double
C) ten times
D) fifty times

Question 78

When making income comparisons across countries, economists generally prefer to use

A) the exchange rate conversion method.
B) the consumer price index ratio method.
C) the purchasing power parity method.
D) the interest rate differential conversion method.

Question 79

In order to achieve a high economic freedom rating, a country must

A) provide secure protection of privately owned property and evenhanded enforcement of contracts.
B) refrain from creating barriers that limit domestic and international trade.
C) rely more fully on markets rather than governments to allocate goods and resources.
D) all of the above.

Question 80

Concerning economic freedom, which of the following is true?

A) Economic freedom is present if a country is a political democracy.
B) Economic freedom ratings indicate the consistency of a nation's institutions and policies with personal choice, freedom of exchange, and protection of private property.
C) Economies that are highly free tend to grow less rapidly than those with less economic freedom.
D) All of the above are correct.