Which of the Following Statements Is True of Creative Destruction

question 23

Multiple Choice

Which of the following statements is true of creative destruction?

• A) Creative destruction is generally bad for an economy.
• B) Creative destruction is encouraged in economies with extractive institutions.
• C) Creative destruction creates losses for some economic agents and benefits for others.
• D) Creative destruction is a phenomenon that was prevalent before 1800.

---

Definitions:

Aggregate Demand

Whole demand for merchandise and services in an economy, at a particular overall price point within a defined temporal scope.

Money Supply

The sum of all financial assets in an economy at a particular time, encompassing cash, deposits in banks, and other easily convertible assets.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all final goods and services produced within a country's borders in a given year, reflecting the real quantity of production.

Expansionary Monetary Policy

A policy by the central bank to increase money supply and encourage economic growth, typically through lowering interest rates.