Explain the differences between inclusive and extractive economic institutions
What will be an ideal response?
Inclusive economic institutions protect private property, uphold law and order, allow and enforce private contracts, and allow free entry into lines of businesses and occupations. On the other hand, extractive economic institutions do not protect property rights, do not uphold contracts, interfere with the working of markets and instead erect significant entry barriers into businesses and occupations.
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If a security held by a bank falls in market value, that loss
A) must be recorded by the bank, no matter what. B) will be recorded by the bank only if the security is of the type they hold to maturity. C) will be recorded by the bank only if the security is of the type they often sell before maturity. D) will be recorded by the bank only if it sells the security.
One should ignore the degree of income inequality _____
a. when one considers the design of redistribution programs b. when one only cares about improving the lot of the worst off in society c. when considering whether or not to transfer resources from the rich to the poor d. when considering progressive taxation
In the above figure, a movement from point B to point C could be explained by
A) an increase in the price level. B) a decrease in the quantity of money in circulation. C) increased government spending. D) the real-balance effect.
When a monopolist sells the same product at different prices and the prices are related to cost differences, we have
A) monopoly pricing. B) marginal cost pricing. C) price discrimination. D) price differentiation.