In this chapter, we noted that successful economies are more likely to have many failing firms. If a nation's government instead made it impossible for inefficient firms to fail by giving them loans, cash grants, and other bailouts to stay in business, why is that nation likely to be poor?

That nation is likely to be poor because if inefficient firms are kept from failing,

A: there would be more production, consumption, and output for any given level of investment.

B: the labor force will move from strong firms to weak firms, leading to a decrease in output.

C: there would be less production, consumption, and output for any given level of investment.

D: more workers would be spending their days producing more and consuming more.