Explain how market economies are generally better able to achieve technological progress than are centrally planned economies
What will be an ideal response?
In a centrally planned economy, decisions regarding the allocation of resources are made by government employees paid a salary, not by independent entrepreneurs whose own finances are at stake. Independent entrepreneurs make choices for the use of resources based on the expected profitability of various projects. This drive for profit provides an incentive for technological change that centrally planned economies are unable to duplicate. The result is that technological progress is more likely in market economies than in centrally planned economies.
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Under the Bretton Woods exchange rate system, ________ could sell their dollars to the American government in exchange for gold
A) American citizens B) foreign central banks C) foreign citizens D) all of the above
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline