Use the following to answer questions:
-(Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from a gradual decline in property rights because of excessive government intervention?

Question

Use the following to answer questions: 
-(Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from a gradual decline in property rights because of excessive government intervention?

Quizplus · Accepted Answer

The gradual decline in property rights due to excessive government intervention reduces incentives for innovation, investment, and risk-taking. As a result, productivity growth slows down, leading to a shift from point C to B. This shift also causes a slowdown in long-run economic growth and a decrease in real GDP.

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