How does the political system of a country affect its economic performance?
a. The political state dictates what will be produced and how it will be produced for many LDC countries and the success of their economies depends upon the success ofthe political leaders in mobilizing the resources of the economies
b. Political revolution is creative in the same way that technological change is creative in the economic system, and these creativities spark the economy's economicperformance.
c. The right to vote is equivalent to consumer sovereignty, which is the right to choose one's consumption and employment.
d. Political honesty, such as one law for all, helps the poor and they are the backbone of an economy's production.
e. Political stability is a prerequisite for long-term investment.
E
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If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms' inventories? How do firms change their production? And what happens to real GDP?
What will be an ideal response?
Which of the following does not represent a "labor market rigidity" to which critics refer when discussing unemployment in Europe?
A) generous unemployment insurance B) restrictive monetary and fiscal policies C) a high degree of employment protection D) relatively high minimum wages E) none of the above