Why do political instability and insecure property rights retard economic growth?
a. Fear that private property will be confiscated substantially reduces the incentive to invest and create wealth.
b. When property rights are insecure, foreign investors will be reluctant to invest in the country.
c. Savings will tend to flow out of a country if individuals fear their property is insecure.
d. All of the above are correct.
D
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In a market system, what provides individuals the information needed to make decisions?
A) insurance B) government C) patents D) prices
For this question, assume that policy makers are pursuing a fixed exchange rate regime and that output is initially greater than the natural level of output. The economy will tend to move toward the natural level of output when which of the following occur?
A) an increase in the price level B) a devaluation of the currency C) a reduction in the domestic interest rate D) an increase in the foreign price level E) none of the above