Which of the Following Is True of Economic Rules and Institutions

question 48

Multiple Choice

Which of the following is true of economic rules and institutions?

• A) When the rules and institutions of a country encourage productive actions, investment will be attracted and incomes will grow.
• B) When the rules and institutions of a country discourage productive actions, investment will be attracted and incomes will grow.
• C) Economic analysis indicates that rules and institutions do not exert much impact on investment and the growth of income.
• D) Rules and institutions influence high-income economies, but there is no evidence that they exert an impact on investment, growth, and the overall performance of low-income economies.

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Definitions:

Record Depreciation Expense

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Allocate Prepaid Insurance

involves distributing the cost of insurance premiums over the period that the insurance coverage relates to, recognizing it as an expense over time rather than all at once.

Accrue Salaries Payable

Accrue Salaries Payable involves recording the salaries earned by employees that have not yet been paid, recognizing the liability before the cash is disbursed.