Which of the following statements is false?
a. Political activities consistent with economic efficiency tend to emerge naturally from the unconstrained democratic political process.
b. Constitutional rules establishing procedures and limiting the ability of the political process to engage in redistributive activities can improve the economic efficiency of government.
c. Rent-seeking activity tends to retard the economic prosperity of a nation because it takes resources away from productive private sector activities.
d. Unconstrained democratic governments often enact special-interest programs that waste resources and impair the standard of living of a country.
A
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Which of the following is most important for long-run growth and a healthy economy?
a. a low rate of household savings and a high rate of consumption b. a high rate of both savings and consumption c. a high rate of government expenditures financed by borrowing d. high tax rates and budget surpluses
If the economy is operating at a point beyond its institutional production possibilities frontier (institutional PPF), then the economy is
A) producing Natural Real GDP and operating at the natural unemployment rate. B) producing less than Natural Real GDP and operating below the natural unemployment rate. C) producing more than Natural Real GDP and operating above the natural unemployment rate. D) producing more than Natural Real GDP and operating below the natural unemployment rate. E) none of the above