If the Political Leaders of a Country Wanted to Promote

Multiple Choice

If the political leaders of a country wanted to promote economic growth,which of the following policy alternatives would be most effective?

A) price controls in order to keep the price of food low
B) expansionary monetary policies designed to increase the rate of inflation
C) increasing marginal tax rates in order to increase government subsidies and transfers
D) elimination of price controls and trade restraints and establishment of a monetary policy consistent with long-run price stability (a low rate of inflation)