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:

Unilateral Tariff

Tariffs imposed by one country on the imports from all or specific nations, without reciprocal action.

Imported Goods

are items brought into a country from abroad for sale or use, typically involving a transaction between an importer and a foreign producer.

Chinese Yuan

The official currency of the People's Republic of China, used as a medium of exchange and a store of value.

Appreciated

Refers to an increase in value or price of an asset or currency over time.