The absence of a legal system that protects property rights and the lack of machinery to enforce that system in a market economy usually results in
A) an improvement in the operating efficiency of newly privatized firms.
B) reduced barriers to foreign direct investment and international trade.
C) an increase in the incentives to engage in economic activity.
D) deregulation and privatization of the economy.
E) the lack of incentive to engage in economic activity.

Question

Quizplus · Accepted Answer

Without a legal system to protect property rights, individuals and businesses have little assurance that their investments and efforts will be safeguarded, leading to a lack of incentive to engage in economic activity.

The Absence of a Legal System That Protects Property Rights