Mandatory controls on economic activity would
A)limit economic growth possibilities.
B)prevent the economy from achieving potential GDP.
C)reduce the amount of poverty.
D)increase potential GDP.

Question

Quizplus · Accepted Answer

Mandatory controls on economic activity, such as regulations and taxes, can limit the economic growth possibilities by adding extra costs and reducing incentives for investment and entrepreneurship. This can result in lower productivity, innovation, and job creation, ultimately leading to a lower potential GDP. While some regulations may reduce poverty, mandatory controls on economic activity alone are not sufficient to address social issues such as poverty and inequality.

Mandatory Controls on Economic Activity Would