CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

An open trade policy and the resulting increased competition from foreign companies will force less efficient domestic companies to exit and more efficient ones to innovate and raise the efficiency of the overall national economy. This is the ______ according to endogenous growth models.
A. Selection effect.
B. Scale effect.
C. Backwardness effect.
Explanation: Endogenous growth models predict that a more open trade policy will permanently raise the rate of economic growth.

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