Why does a nation's standard of living depend on property rights?
Property rights are an important prerequisite for the price system to work in a market economy. If an individual or company is not confident that claims over property or over the income from property can be protected, or that contracts can be enforced, there will be little incentive for individuals to save, invest, or start new businesses. Likewise, there will be little incentive for foreigners to invest in the real or financial assets of the country. The distortion of incentives will reduce efficiency in resource allocation and will reduce saving and investment which in turn will reduce the standard of living.
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If a market begins in equilibrium and then the demand curve shifts leftward, a
A) surplus is created, which is eliminated by a rise in price. B) shortage is created, which is eliminated by a rise in price. C) shortage is created, which is eliminated by a fall in price. D) surplus is created, which is eliminated by the supply curve shifting leftward. E) surplus is created, which is eliminated by a fall in price.
In performing which of its primary functions does money solve the problem of the double coincidence of wants?
A) medium of exchange B) unit of account C) store of value D) barter system E) money supply
At 2015 prices, the value of production in 2016 was 6 percentage points higher than in 2015. At 2016 prices, the value of production in 2016 was 4 percentage points higher than in 2015
Using the chain-weighted output index, real GDP is ________ in 2016 than in 2015. A) 10 percent greater B) 5 percent greater C) 7.5 percent greater D) 4 percent smaller
Exhibit 9-6 Two-Firm Payoff Matrix
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Assume costs are identical for the two firms in Exhibit 9-6. If both firms were allowed to form a cartel and agree on their prices, equilibrium would be established by:
A. Widget Co. charging the low price and Ajax Co. charging the high price. B. Widget Co. charging the high price and Ajax Co. charging the low price. C. Widget Co. charging the low price and Ajax Co. charging the low price. D. Widget Co. charging the high price and Ajax Co. charging the high price.