Good Institutions

question 210

Multiple Choice

Good institutions:

• A) reward those who create value and increase efficiency with higher profits.
• B) distribute wealth evenly across the economy.
• C) result in growth rates approximately equal to those in countries with poor institutions.
• D) matter only if the country has a large amount of both physical and human capital.

---

Definitions:

Price

The amount of money required to purchase a good or service.

Average Price

The sum of all the prices of all the units sold divided by the number of units.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Profits

Financial gains obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operation.