A country's economic,social,and political climate can increase its level of potential output and rate of growth by

Question

Quizplus · Accepted Answer

Encouraging competition and allowing economic and political freedom to foster the introduction of new ideas can stimulate innovation, entrepreneurship, and efficiency in resource allocation, which can increase potential output and rate of growth. A country that facilitates the freedom of individuals to pursue their economic interests and participate in political decision-making processes can attract foreign investment and skilled workers, which can contribute to economic development. In contrast, choices A, B, and C involve restrictions on individual freedom and property rights, which can hinder economic growth by limiting incentives to innovate and invest. Feudalism, as in choice E, is an outdated socio-economic system, characterized by a hierarchical structure and limited mobility of labor and capital, which is incompatible with modern economic development.

A Country's Economic,social,and Political Climate Can Increase Its Level of Potential