Free Markets Produce Allocatively Efficient Outcomes and Have No Flaws

question 82

True/False

Free markets produce allocatively efficient outcomes and have no flaws.

---

Definitions:

Economic Contraction

A decline in national output as measured by GDP, often leading to higher unemployment and lower spending.

Multiplier Size

The ratio of change in the economic output to the initial change in spending or investment that brought it about, indicating the scale of impact on the economy.

Government Purchases

Expenditures on goods and services by government at all levels, excluding transfer payments.

Total Output

The total value of all goods and services produced in an economy during a specific time period.