Strong property rights are important for modern economic growth because:
A. they allow governments to extract the gains from private citizens’ investments.
B. people are more likely to invest if they don’t fear that others can take their returns on investment without compensation.
C. they ensure an equitable distribution of income.
D. business cycle fluctuations will be smaller and less likely to disrupt investment patterns.
The Right Answer is people are more likely to invest if they don’t fear that others can take their returns on investment without compensation.
Property rights are also institutions that are manifested by formal means (such as laws, contracts and patents) and informal (respect for the good of others). The right to property, as an institution, also influences economic governance, since its existence generates trust from economic agents and this can directly impact the decision to invest in a country and, therefore, in the economic development of that country. In a country where there is extensive protection of intellectual property, for example, with the establishment of long-standing patents, inventors may spend less resources in an attempt to “hide” their discoveries than in countries where there is little or no protection for this. type of property.
So The Right Answer is; Strong property rights are important for modern economic growth because:
People are more likely to invest if they don’t fear that others can take their returns on investment without compensation.