Properly enforced property rights will usually cause
A. lower levels of investment spending.
B. lower levels of real interest rates.
C. higher levels of investment spending.
D. higher levels of real interest rates.
Answer: C
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Consider the two economies of Lithasia and Barylia. Economic agents in Lithasia have coordination and incentive problems, while in Barylia social surplus is maximized
Which economic system does each of these economies most likely have? Explain your answer.
One might commit the fallacy of composition by concluding that
a. statements that are true during prosperity are necessarily true during depression b. what is good for the individual is necessarily good for the group c. an event that precedes another is necessarily the cause of the latter d. intentions need not coincide with actions e. the composition of a complex product is not revealed by its exterior appearance