In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-For the world as a whole, economic freedom increased since 1994 as the countries opened up in the world market and the governments slashed tax rates.

Question

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
  In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-For the world as a whole, economic freedom increased since 1994 as the countries opened up in the world market and the governments slashed tax rates.

Quizplus · Accepted Answer

The statement refers to economic freedom increasing since 1994 and governments slashing tax rates, which implies a trend towards deregulation and increased market liberalization. Therefore, it is true that economic freedom increased since 1994.

In the Following Figure, the First Panel Shows a Market