QuestionMay 21, 2025

12. How did the economy change after the national government had more control over it?

12. How did the economy change after the national government had more control over it?
12. How did the economy change after the national government had more control over it?

Solution
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Answer

The economy typically becomes more stable but less efficient, with potential impacts on growth, employment, inflation, and trade. Explanation 1. Identify Economic Changes The national government's increased control often leads to centralized planning, regulation, and intervention in markets. 2. Analyze Impact on Growth Centralized control can stabilize the economy but may reduce efficiency and innovation due to less competition. 3. Assess Effects on Employment Government control can lead to job creation through public sector expansion but might limit private sector opportunities. 4. Evaluate Inflation and Prices Price controls can stabilize inflation but may cause shortages if prices are set below market levels. 5. Consider Trade and Investment Increased government control can affect foreign investment and trade policies, potentially reducing openness.

Explanation

1. Identify Economic Changes<br /> The national government's increased control often leads to centralized planning, regulation, and intervention in markets.<br /><br />2. Analyze Impact on Growth<br /> Centralized control can stabilize the economy but may reduce efficiency and innovation due to less competition.<br /><br />3. Assess Effects on Employment<br /> Government control can lead to job creation through public sector expansion but might limit private sector opportunities.<br /><br />4. Evaluate Inflation and Prices<br /> Price controls can stabilize inflation but may cause shortages if prices are set below market levels.<br /><br />5. Consider Trade and Investment<br /> Increased government control can affect foreign investment and trade policies, potentially reducing openness.
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