Define the term "property rights." Explain why the lack of well-defined and enforceable property rights is detrimental to the smooth functioning of a market system
What will be an ideal response?
The term "property rights" refers to the rights that individuals or firms have to the exclusive use of their resources, within the confines of the law. Well-defined and enforceable property rights provide the incentive for people and firms to invest resources and undertake risks. This encourages the production of a wide range of goods and services. Without property rights and the means to enforce these rights, no person would want to undertake such a risk.
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Providing unemployment insurance is one way a government can
A) create public-works programs. B) break up monopolies. C) enforce rules of exchange. D) reduce economic uncertainty.
The immediate effect of a member bank's sale of U.S. government securities to the Fed is a(n):
a. increase in that bank's required reserves. b. decrease in that bank's required reserves. c. increase in that bank's excess reserves. d. decrease in that bank's excess reserves. e. decrease in the Fed's assets.