Why Do Political Instability and Insecure Property Rights Retard Economic

question 31

Multiple Choice

Why do political instability and insecure property rights retard economic growth?

• A) Fear that private property will be confiscated substantially reduces the incentive to invest and create wealth.
• B) When property rights are insecure, foreign investors will be reluctant to invest in the country.
• C) Savings will tend to flow out of a country if individuals fear their property is insecure.
• D) All of the above are correct.

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Definitions:

Easily Shifted

A descriptor for economic burdens or benefits that can be transferred or moved easily from one party to another.

Income Tax

A tax levied by governments on individuals or entities' income, affecting earnings from various sources including wages, investments, or profits from business.

Retail Sales Tax

A tax imposed on the sale of goods and services at the retail level.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.