Which of the Following Would Be Most Likely to Encourage

question 68

Multiple Choice

Which of the following would be most likely to encourage capital formation in a less-developed country?

• A)the expectation of sustained high inflation
• B)the expectation that property rights will be highly secure in the years ahead
• C)the imposition of high tariffs and other restraints limiting imports
• D)higher personal and corporate tax rates

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Definitions:

Marginal Product

Marginal Product is the increase in output that results from employing one more unit of a factor of production, holding all other factors constant.

Rental Prices

The amount of money charged by a landlord to a tenant for the use of property, such as an apartment or commercial space.

Factor Market

Markets where factors of production (such as labor, capital, and natural resources) are bought and sold.

Human Capital

The competencies, understanding, and expertise held by a person or group, considered regarding their importance to a company or community.