What are the proximate causes of prosperity? How are they related to the fundamental causes of prosperity?
What will be an ideal response?
Proximate causes of prosperity are factors such as physical capital, human capital, and technology. They are referred to as proximate causes of prosperity because they link high levels of prosperity to high levels of the inputs of production, but without providing an explanation as to why the levels of those inputs are high.
Proximate causes of prosperity arise out of fundamental causes of prosperity. Fundamental causes of prosperity are factors that are at the root of the differences in the proximate causes of prosperity.
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What is an automatic stabilizer?
A) It refers to a discretionary policy that is triggered when actual output is not equal to potential output to improve the economy's performance. B) It refers to a stabilization program that keeps inflation in check automatically. C) It refers to any government program that tends to reduce fluctuations in GDP automatically. D) It refers to a government program that is automatically triggered when the economy enters a recession.
When market participants have adaptive expectations
A) they use all information available to them. B) they only slowly adjust their expectations to news which could affect prices or returns. C) they are more likely to make accurate forecasts than if they have rational expectations. D) they are able to forecast interest rates more accurately than inflation rates.