Johnsonville Is a Small and Poor Nation,but Its Current President

question 31

Multiple Choice

Johnsonville is a small and poor nation,but its current president has a genuine desire to create more wealth for Johnsonville's citizens.The president has received recommendations from several of her advisors.Which of the following recommendations is likely to create the most wealth for Johnsonville?

• A)establish barriers to trade to protect Johnsonville businesses from foreign competition.
• B)establish a business environment that promotes and rewards entrepreneurship.
• C)acquire more land by invading a neighboring country that is even poorer and weaker than Johnsonville.
• D)use foreign aid from other nations to purchase more tools and machinery.

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Definitions:

Marginal Product

The additional output that is produced by adding one more unit of a specific input, keeping all other inputs constant.

Profit-maximizing

A strategy or point where a firm or entity makes the highest possible profit under given market conditions.

Negative

Often used to describe a detrimental condition or decrease in quantity or quality in various contexts.

Real Wages

Wages that have been adjusted for inflation, representing the actual purchasing power of income.