Why are inclusive property rights considered to be sources of wealth?
Wealth means a person has more choices, and more inclusive property rights are sources of wealth. Such property rights give an individual more options and greater incentives to avoid inefficient choices. While possessory rights facilitate investment in specialized assets that cut production cost, a dependable legal system allows the individual to better predict future flows of income and loan repayments from this investment.
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Alan runs the only taxi service in town. Whenever he raises his fares above $.30 per mile, other taxi firms enter and compete with him to drive his fares back to $.30 per mile. Describe what kind of market Alan is operating in and if it is plausible that Alan might set his fare so as to achieve efficiency? Explain
Assume that the MPC is 0.9 and investment falls by $30 billion. What is the change in real GDP?
A. ?$300 billion B. ?$270 billion C. ?$93 billion D. ?$39 billion