Multiple Choice
According to recent Federal Reserve surveys, what percentage of Americans reported that they could not pay a surprise \$400 bill with cash or its equivalent?
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0. Basic Principles of Economics
Introduction to Economics
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Why do countries provide financial incentives?
A
To reduce the overall supply of goods and services in the economy
B
To discourage foreign trade and promote isolationism
C
To increase government spending without any specific purpose
D
To encourage desired economic activities such as investment or innovation
Verified step by step guidance1
Understand the purpose of financial incentives in economics: they are tools used by governments to influence economic behavior.
Recognize that financial incentives are designed to encourage specific activities, such as investment, innovation, or production in certain sectors.
Analyze why reducing overall supply or discouraging foreign trade would not be typical goals of financial incentives, as these actions can harm economic growth.
Consider that increasing government spending without purpose does not align with the strategic use of incentives, which aim to achieve targeted economic outcomes.
Conclude that the main reason countries provide financial incentives is to promote desired economic activities that contribute to growth and development.
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